Question What is the difference between Chapter 7 and Chapter 13 bankruptcy?

[LeelaSeville]

I've been doing my research on both types of bankruptcy, but I'm not entirely sure what each one does? What are the differences between 7 and 13? I know that Chapter 7 involved liquidation, but I've heard it can be used for both businesses and individuals. Can anyone clarify this in a very simplified manner? I'd love to know. Thanks, guys!

[keepmine]

First of all, you file the chapter of bk for which you qualify.
A Chapter 7 is a liquidation of assets above whatever level your state exempts. No assets and unsecured creditors get nothing and the process is over in 90-120 days.
In a 13, if you have monthly dispsoable income or assets you wish to protect, secured debt is payed at 100% and unsecured creditors get whatever monthly dispsoable income is left over a 60 month period.

[KAKRN97]

OR if you are filing Ch 13 and pass the means test, you pay your unsecured debts over 3 yr(36 months). This is what is happening in my case. I have approx $1350 in DMI but pass the means test based on household income. Had I filed two months ago(before my husband went back to work)I'd have qualified for Ch 7 no problem.