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Old 03-06-2010, 02:17 PM   #2 (permalink)
Drillchart
Glow Plug
 
Join Date: May 2005
Location: PA
Posts: 266

Chapter 13 is a restructuring of debt, they would still have most of their debt but the court would indicate monthly payments that would have to be paid and the creditor and debtor would have to accept these terms.

Chapter 7 is a liquidation of ones assets. The court orders the selling of assets through a 3rd party, creditors take what they can get, debts are settled to those creditors.

Here's some links, that should help clarify:

http://www.uscourts.gov/bankruptcyco.../chapter7.html

http://www.uscourts.gov/bankruptcyco...chapter13.html

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