What Is the Difference Between Chapter 7 & Chapter 13 Bankruptcy?

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The difference between Chapter 7 and Chapter 13 bankruptcy is that with Chapter 7 the consumer agrees to liquidate assets to pay off debts, and with Chapter 13, the consumer negotiates that actual amount of debts. Discuss the different forms of bankruptcy with a tax lawyer using advice from an investment consultant in this free video on bankruptcy.

Part of the Video Series: Personal Finance & Money Management
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Video Transcript

Hi, I'm Roger Groh. Today we're here to talk about what happens if you file for bankruptcy. There are any number of ways to do that and today we're exploring the difference between filing for chapter sever and filing for chapter thirteen. Under chapter seven you agree to liquidate everything that you own and then use that cash to pay down the debt that you owe people. Under chapter thirteen what you actually do is negotiate the amount of debt that ultimately you'll have to pay and then work out a payment schedule to meet that obligation. Big difference and you should have lengthy discussions with your tax adviser and lawyer about which way is best for you among all of the ways that you're able to file for bankruptcy. Anyway, I'm Roger Groh and that's the difference between filing for chapter seven and filing for chapter thirteen.

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