Under Chapter 7 bankruptcy, liquidation is the way of getting out of debt. Individuals with a regular income who are struggling with debt file under Chapter 13.
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Skip to main contentUnder Chapter 7 bankruptcy, liquidation is the way of getting out of debt. Individuals with a regular income who are struggling with debt file under Chapter 13.
Chapter 13 bankruptcy is often called “wage earners” bankruptcy. This type of bankruptcy is great for someone who is behind on house or car payments as it sets up a type of “payment plan” for you.
When you file for Chapter 13 bankruptcy, you are given the opportunity to restructure your debts and repay them over a period of 3-5 years via a payment plan, or the Chapter 13 plan. Chapter 13 is often looked to as a reorganization of finances – it is not a liquidation of your assets.