Faced with all the issues in considering bankruptcy, it can be hard to get your arms around the differences between Chapter 7 and Chapter 13.
The table below compares various aspects of Chapter 7 and Chapter 13.
| Chapter 13 | Chapter 7 | |
| Eligibility | Amount of debt capped | Must pass or be excused from means test |
| Fees | Lower initial cost- generally more expensive than 7 over the life of the plan | Generally less expensive than 13 depending on issues and locality |
| Timing | Case can be filed quicker because fees can be paid through plan. | Case can’t be filed until all fees are paid. |
| Credit reporting | 7 years from the date of filing in major credit reporting agencies | 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. |
| Duration | Plan runs 3-5 years | Discharge within 4-5 months |
| Control | You have absolute right to dismiss the case; can convert to Chapter 7 | Dismissal unavailable; trustee directs case. Conversion to 13 possible |
| Discharge | Broader discharge in 13 | More debts survive 7 |
| Voluntary Secured debts | Cure payable over life of plan-strip down may be possible | Liens survive discharge |
| Costs | Filing fee $281 | Filing fee $306 |
| 401(k) loans | Repayment permitted | Repayment excluded from allowable expenses for means test |
There are lots of other differences that an experienced bankruptcy attorney can explain.
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What you have to do to file bankruptcy
