Request a Free Bankruptcy Evaluation
What's the Difference Between Chapter 7 & Chapter 13 Bankruptcy?
You've probably heard a lot about bankruptcy lately. Last year alone, more than 1 million Americans turned to filing bankruptcy as a way to resolve their debts.
Below is a guide breaking down the differences between Chapter 7 and Chapter 13 bankruptcy.
Chapter 7 Bankruptcy
A successful Chapter 7 bankruptcy filing discharges (eliminates) unsecured debts like credit card debt, utility bills, payday loans and medical bills.
Those wishing to file Chapter 7 must "pass" the Chapter 7 means test, which determines a person's eligibility. Generally, Chapter 7 bankruptcy is a debt-relief option for people who:
• are having difficulty making bill payments
• have experienced income loss and/or incurred unexpected expenses
• have little/no money left after paying monthly bills
• rent or have little equity in their home
Chapter 7 also provides the protection of the automatic stay, which may stop creditor harassment, lawsuits, wage garnishment and repossessions. Learn more...
Chapter 13 Bankruptcy
Under a Chapter 13 repayment plan, the filer works with a bankruptcy trustee to establish a realistic plan to catch up on their past-due balances while maintaining their current payments.
Most plans allow 3-5 years for the filer to get back on track. At the end of the plan, if all payments were made on time, any left over unsecured debt may be discharged.
Once a Chapter 13 bankruptcy case is filed, a court order goes into effect that prohibits creditors from contacting the filer and it may stop foreclosure, repossession, lawsuits and wage garnishments. Learn more...
Making the Right Decision About Bankruptcy Bankruptcy has helped millions of people get out of debt and get back on track, but it's important that you make the right decision for you.
If you're thinking about filing bankruptcy, it may be a good idea to talk to a local bankruptcy lawyer about your debt-relief options.
A local bankruptcy attorney can help you understand the differences between Chapter 7 bankruptcy and Chapter 13 bankruptcy, so that you can make an educated decision about the best next step for you.
Fill out the form below or call (866) 246-1717 for a free bankruptcy case evaluation.