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Deciding between Chapter 7 and Chapter 13 bankruptcy

On Behalf of | Jun 22, 2023 | BANKRUPTCY LAW - Bankruptcy

Once you have decided to file for bankruptcy, you are likely to have many questions. One of your biggest questions might be the type of bankruptcy to file.

While there are various types of bankruptcies, Chapter 7 and Chapter 13 bankruptcies are the two types of bankruptcies filed by private individuals. Before deciding which one to file, it is important to understand what each one involves.

Chapter 7

A Chapter 7 bankruptcy discharges all your qualifying debt. Some debts do not qualify for bankruptcy, such as student loans, alimony or child support.

Generally, a Chapter 7 bankruptcy is quicker and simpler than a Chapter 13. Once you start the Chapter 7 bankruptcy process, your debt can be discharged in as little as six months.

Chapter 13

Rather than discharging your debt, a Chapter 13 bankruptcy involves repaying your debt through a repayment plan. The plan usually lasts between 3-5 years.

A Chapter 13 bankruptcy might be a better option if you have assets that you want to keep. Many people’s biggest priority with a bankruptcy is keeping their home and a Chapter 7 bankruptcy does not protect you from home foreclosure or repossession.

Therefore, if you want to keep your home, a Chapter 13 bankruptcy could be better. However, you must meet certain requirements to qualify for a Chapter 13 bankruptcy.


One of these requirements is having an income. It can be difficult to show that you can make payments for several years if you do not have an income. You must also be current with your tax filings.

There are also requirements for a Chapter 7 bankruptcy. You must pass a means test, which is a test that examines your income, expenses and household size.

Both types of bankruptcies have rules surrounding prior bankruptcy filings. You may not qualify for either type of bankruptcy if you filed a bankruptcy petition in the past 6 months that was dismissed.

Filing for bankruptcy is a major financial decision. Since everyone’s situation is different, it can help to talk over your options with a professional.