How Bankruptcy Works

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There are two different types of consumer bankruptcy – Chapter 7 and Chapter 13. If you are deciding if bankruptcy will work for you, or determining which type of bankruptcy will best meet your needs, take the time to learn about both Chapter 7 and Chapter 13.

In Chapter 7 bankruptcy, commonly called “liquidation” bankruptcy, you discharge most or all of your debts. However, you may have to give up some of your property (although most debtors keep most of their property).

In Chapter 13 bankruptcy, commonly called “reorganization” bankruptcy, you keep your property. However, you must repay some debts in full, and others in part through a repayment plan that lasts either three or five years.

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