Feb
01
2012

The difference between chapter 7 and chapter 13 bankruptcy

Dear Experian,

What is the difference between chapter 7 and chapter 13 bankruptcies?

- RYN

 

Dear RYN,

Under chapter 7 Bankruptcy, or “Liquidation of Assets,” certain consumer assets are liquidated to pay off outstanding debts to creditors. Once filed, this type of bankruptcy is typically discharged approximately 3 months later with no further payments made by the consumer.

Chapter 13 bankruptcy is an Adjustment of Debt plan under which the court may approve a repayment plan. Under chapter 13 bankruptcy, the consumer must make partial payments to its creditor periodically over a period of several years. Once the repayment plan is complete, the bankruptcy is discharged.

Bankruptcy public records are deleted based on the filing date. The discharge date has no effect on when the bankruptcy or accounts included in the bankruptcy are deleted from Experian’s files.

Chapter 7 bankruptcy is deleted 10 years from the filing date because there is no repayment of any of the debt. Chapter 13 bankruptcy is deleted seven years from the filing date because a portion of the debt is repaid under the discharge plan.

Thanks for asking.

- The “Ask Experian” team

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