What Are the Different Types of Bankruptcy?
There are actually several types of bankruptcies, but the two most common are Chapter 7 and Chapter 13. When you hear the word “bankruptcy” most people are thinking of Chapter 7 bankruptcy. In Chapter 7, all the debtor’s property is liquidated (sold) and used to pay off debts. With a few exceptions, the remaining debt is wiped clear. Chapter 13 is more of a debt consolidation and repayment plan. The property of the debtor is not sold to pay off the debt. Instead a repayment plan is established and as long as the debtor complies with the plan they keep their property.