Summary
The guide explains the key differences between Chapter 7 and Chapter 13 personal bankruptcy in the U.S. Chapter 7 quickly eliminates most unsecured debts through liquidation, often concluding within months, but may risk non-exempt assets. Chapter 13 restructures debt into a court-approved repayment plan over three to five years, allowing filers to keep property and catch up on secured debts such as mortgages or car loans. Eligibility differs: Chapter 7 uses a means test based on income, while Chapter 13 requires a steady income and debt limits. Both impact credit but offer structured paths to financial recovery.
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