Chapter 7 Bankruptcy
Chapter 7 bankruptcy allows you to get a fresh start quickly. In a Chapter 7 bankruptcy, your non-exempt assets (if any) are liquidated and used to pay off debt. In most cases, no assets are liquidated. When you file for a Chapter 7 bankruptcy, you can essentially become debt-free overnight. All consumer debts are dischargable.
Chapter 13 Bankruptcy
A Chapter 13 bankruptcy works differently than a Chapter 7. Instead of liquidating assets, a Chapter 13 bankruptcy sets you up with an affordable repayment plan that usually lasts three to five years. There are several reasons for using a Chapter 13 bankruptcy.
If you’ve fallen behind on your house payments and your lender has sent you an intent to foreclose on your property, you must act quickly! You still have options available to help you stay in your house. If you do not respond in the foreclosure action within 20 or 30 days, you are automatically in default.