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|
|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.|
|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.
What you have to do to file bankruptcy