The differences between the various types of bankruptcy can significantly impact which option may work best for certain individuals. Therefore, South Carolina residents may wish to find out more information on Chapter 7 and Chapter 13 bankruptcy, the two most common forms of personal bankruptcy. Such information could help interested parties determine whether they may qualify for either process and if they would like to move forward.
Chapter 7 is the more common form of bankruptcy. This process involves individuals who do not have enough disposable income to repay creditors. As a result, liquidation takes place in order to gain funds to pay off debts. Only nonexempt property is up for liquidation, which means that individuals are not left with nothing after the process. Additionally, this process could help discharge unsecured debts like outstanding credit card balances.
With Chapter 13, individuals utilize a repayment plan that allows for paying back creditors over the course of a few years. Qualifying individuals typically make too much money to qualify for liquidation bankruptcy. Chapter 13 also means that parties get to keep their property, and their repayment plan works with their disposable income for manageable payments.
Because of the qualifications necessary for each type of bankruptcy, individuals may not get to necessarily choose their option. However, each avenue has benefits that could potentially help South Carolina residents who are struggling financially. Therefore, interested parties may wish to consult with legal professionals who could offer reliable information on Chapter 7 and Chapter 13 bankruptcies and how specific cases could be handled.
Source: groundreport.com, "Understanding the Difference between Chapter 7, 11 and 13 Bankruptcies", Dec. 17, 2016