Bankruptcy Chapter 7 VS Bankruptcy Chapter 13
Bankruptcy Chapter 7 VS Bankruptcy Chapter 13
Bankruptcy Chapter 7 vs. Bankruptcy Chapter 13
Helping troubled homeowners is our mission.
| Chapter 7 | Chapter 13 | |
|---|---|---|
| How does it work? | Most of your debt disappears, paid off in cash, investments, home equity and non-exempt property | The debt stays and is paid off on a plan within 3-5 years with remaining debt getting potentially discharged |
| Who can file? | Individuals and business entities | Individuals only |
| When to file? | You don’t have much property and can’t cover your basic living expenses | Sufficient income and assets to protect |
| Eligibility | To be eligible you need to pass the chapter 7 means test based on income and expenses | To be eligible you cannot have more than a given amount of unsecured or secured debt at the time of filling |
| Negatives | This stays on your credit report for 10 years and does not provide a way to avoid foreclosure or repossession | This stays on your credit report for 7 years and you may have to pay back a portion of general unsecured debts |