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Chapter 7 of Title 11 U.S. Code is the bankruptcy code that governs the process of liquidation under the bankruptcy laws of the U.S. In contrast to bankruptcy under Chapter 11 and Chapter 13, which govern the process of reorganization of a debtor, Chapter 7 bankruptcy is the most common form of bankruptcy in the U.S. [1]
Bankruptcy under Chapter 11, Chapter 12, or Chapter 13 is a more complex reorganization and involves allowing the debtor to keep some or all of his or her property and to use future earnings to pay off creditors. Consumers usually file chapter 7 or chapter 13. Chapter 11 filings by individuals are allowed, but are rare.
The primary difference between Chapter 7 and Chapter 13 bankruptcy is how debts are resolved. Chapter 7 provides a faster path to debt relief through asset liquidation and debt discharge, while ...
Chapter 7, known as a "straight bankruptcy", involves the discharge of certain debts without repayment. Chapter 13 involves a plan of repayment of debts over a period of years. Whether a person qualifies for Chapter 7 or Chapter 13 is in part determined by income. [49] [50] As many as 65% of all US consumer bankruptcy filings are Chapter 7 cases.
Individuals may also file for bankruptcy under Chapter 11, but that is not common. Although any bankruptcy is a kind of financial death, companies may emerge from Chapter 11 financially stable.
In addition to the court dismissing your case, another possible outcome is that your case may be converted to a Chapter 7 bankruptcy. The main difference between Chapter 7 and Chapter 13 is that ...
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