The Difference Between Chapter 7 and Chapter 13 Bankruptcy is a legal procedure that provides debt relief to consumers who cannot pay their bills. The decision to file for bankruptcy is a serious step, and is usually taken when other efforts to correct financial difficulties have failed. Most consumers who declare bankruptcy do so under Chapter 13 or Chapter 7 of the U.S. Bankruptcy Code.
Debtors turn over to a court representative all of their assets for distribution to creditors.
Unlike Chapter 13, there is no repayment plan, and the court will then declare that legally the debtors are no longer in debt. CreditMatters Home Copyright 1999 CreditMatters, a ConsumerInfo. All Rights Reserved.