Before people move forward with filing for consumer bankruptcy, they need to understand the differences between Chapter 7 and Chapter 13.  Below, our Houston law firm highlights the three main differences between these two types of bankruptcy:

1.  People who successfully file for Chapter 7 have their debt discharged.  This means that any debt they owe to creditors, such as credit card lenders, is eliminated.  Chapter 7 is well-known for providing people with a financial fresh start. 

2.  People who successfully file for Chapter 13 do not have their debt discharged.  Instead, they repay their debt to creditors over the time span of three to five years. 

3.  People who successfully file for Chapter 7 bankruptcy may have to go through a process known as liquidation.  During the liquidation process, property is sold and converted to cash.  The cash is then given to people's creditors and applied toward unpaid balances that people owe.

If you have questions about the differences between Chapter 7 and Chapter 13 in Houston, contact the Malaise Law Firm and discuss your concerns with a Houston bankruptcy lawyer.