Chapter 7 Bankruptcy vs. Chapter 13 Bankruptcy - What's the Difference?
Chapter 7(Liquidation) |
Chapter 13(Adjustment of debts
for
an |
| You may want to consider Chapter 7 if: | You may want to consider Chapter 13 if: |
| You have little property except for the basic necessities like furniture and clothing | You have significant equity in a home or other property and you want to keep it |
| You have little or no money left after paying basic expenses each month—or you’re not even meeting basic expenses | You have regular income and can pay your living expenses, but you can’t keep up the scheduled payments on your debts |
| Advantages of Chapter 7: | Advantages of Chapter 13: |
| Most unsecured debts can be discharged (completely eliminated) | You can keep most of your property while spreading out time to pay past due accounts |
| The process moves quickly—you may receive your discharge in just a few months | You’ll have 3-5 years to catch up delinquent accounts—according to a schedule that you and the bankruptcy trustee have agreed is workable for you. |
| Creditors can’t contact you while the automatic stay is in effect—or after debts are discharged. | You’ll make one monthly payment to the bankruptcy trustee for distribution—you’ll have no direct contact with creditors during the protection period of 3-5 years. |
| Co-signers may be protected | |
| Who can file under Chapter 7? | Who can file under Chapter 13? |
| Debtors who have qualified under the “ means test” and completed a required pre-filing session with a credit counselor may file for Chapter 7 bankruptcy protection. | Any individual debtor whose unsecured debts are below $307,675 and whose secured debts are less than $922,975. |
| » More Information about Chapter 7 | » More Information about Chapter 13 |
Need help finding the right solution for you? Fill out our free case evaluation form to schedule a no-obligation consultation with a bankruptcy attorney in your area.
Click Here For a Free Bankruptcy Evaluation