What Is The Difference Between Chapter 7 and Chapter 13?

Chapter 7 and Chapter 13 bankruptcies are the two most common for individual debtors. Both types of bankruptcy are effective in giving you relief if you are in the midst of a financial hardship. The type of relief that you need in order to move forward will affect the type of bankruptcy that you should pursue. When you file for a Chapter 7 bankruptcy, you are essentially seeking for your debts to be discharged. You have to be eligible to file for this type of bankruptcy by undergoing a means test to determine if you can repay your debts. If not, they may be discharged. As a result, some of your non-exempt property and assets may be liquidated in order to repay your creditors of the debt. This will give you the relief and clean start that you need from overwhelming debt.

Chapter 13 bankruptcy is different because your debts will not be discharged. This is generally the type of bankruptcy someone will choose to file for if they do not qualify for a Chapter 7 or if they do not want their assets or property to be liquidated. This bankruptcy involves a 3-5 year repayment plan that will be suitable for your income and repayment abilities. The payments you make will depend on your earnings and the debt that you owe. In short, key differences between this bankruptcy and the Chapter 7 are:

  • You do not lose any property in a Chapter 13
  • The majority of your debts are not discharged
  • You repay all or some of your debts on a repayment plan

If you have any questions regarding the differences between Chapter 7 and Chapter 13, feel free to contact us at Bryant, Logan, Wheeler Law Group, PLC. We have over 50 years of experience in the bankruptcy field and we can help you determine which bankruptcy is right for you. Call now or fill out a free case evaluation form to get started,

Categories: Chapter 13, Chapter 7