Why is Chapter 7 Called a Straight Bankruptcy?
A Chapter 7 filing is often referred to as a straight bankruptcy because a repayment plan is not required like in a Chapter 13 filing. Some of the debtor’s assets will be exempt from a Chapter 7 proceeding, and some others won’t. Those assets that aren’t exempt will be gathered by the bankruptcy trustee and sold to pay legitimate claimants at least some of the amount that the debtor owes them. In a Chapter 13 proceeding, a plan would be approved by the trustee, and debts or portions of them would be paid bo creditors by the debtor over the course of three to five years.
Chapter 7 Offers Quicker Discharge
A Chapter 7 proceeding should also be quicker than a Chapter 13 proceeding. A debtor in a Chapter 7 proceeding can typically be discharged in bankruptcy in six months, while a … Read More