When individuals are considering whether bankruptcy could be right for them, they may begin looking into the different types of bankruptcy. Because there are multiple avenues for this particular debt relief path, South Carolina residents may not fully understand how Chapter 7 and Chapter 13 bankruptcies differ. By gaining more information, individuals may be better able to determine whether they may qualify for a particular type.
When Chapter 7 is discussed, it means that individuals are likely going to liquidate their assets in order to pay back as much secured debt as possible. Secured debts are either totally repaid through liquidation efforts or the collateral used for those debts is surrendered. If there is debt that is unsecured, such as credit card balances, that debt could be completely discharged under Chapter 7.
For Chapter 13 bankruptcy, individuals likely need to have steady and reliable incomes. This type of bankruptcy involves repaying much of the debt that is owed. A repayment plan is structured and approved by the court, and such a plan typically spans the course of three to five years. Individuals use that time to repay debts and get back on track.
Of course, there is additional information about each type of bankruptcy that could prove useful. Therefore, if South Carolina residents wish to learn more about this method of debt relief, they may wish to explore their local resources. Additionally, discussing the particular circumstances of a case with a bankruptcy attorney could help an individual better understand which route may work best for his or her specific situation.
Source: news-gazette.com, “John Roska: How Chapter 7, 13 bankruptcies differ”, John Roska, April 17, 2016