Comparing Chapter 7 And Chapter 13

Which chapter should I file ? is almost always the first question someone considering filing bankruptcy.

This chart will highlight the differences between the two chapters most individuals select.

Chapter 13 Chapter 7
Fees Partial payment only before filing- generally more expensive than 7 Range from $1500 up depending on issues
Timing Less cash upfront required to file because fees can be paid through plan. No case can be filed until all fees are paid.
Credit reporting 7 years from the date of filing. 10 years from the date of filing.
Risk trustee generally supportive of your bankruptcy choice. More scrutiny. UST charged with finding “abusers”.
Assets You keep all your assets You keep all exempt assets; trustee may liquidate non-exempt assets.
Control You have right to dismiss the case; conversion to Chapter 7 is an option Dismissal unavailable; trustee directs case. Conversion possible
Discharge Broader discharge in 13 More debts survive 7
Secured debts Payable over life of plan Prepetition terms control
Costs Filing fee $281; financial management class provided at no cost by trustee Filing fee $306; financial management class paid for by debtor
401(k) loans Repayment permitted Repayment excluded from allowable expenses for means test

Read more

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The power of Chapter 13

About the Author
Northern California bankruptcy lawyer Cathy is a 30+ year veteran of bankruptcy practice in the Silicon Valley. She is known for energetic representation of clients and her command of bankruptcy law.