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Chapter 7
Chapter 7 is a straight bankruptcy authorized under 11 USC Chapter 7. This is a federal proceeding in which bills are forgiven and individuals are entitled to keep all of their exempt assets. Harassing telephone calls stop and utilities may not be disconnected.
Chapter 13
Chapter 13 is a Wage Earner Plan in which creditors are paid through the court at a certain percentage on the dollar. The court stops all interest on credit cards and unsecured debts and allows people to reorganize and pay their bills in an orderly fashion over an extended period of time. Assets such as automobiles and homes are protected.
Chapter 11
Chapter 11 is a repayment plan commonly used by business to repay their debts and/or taxes over an extended period of time at a certain percentage on the dollar, depending on income and expenses.
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