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Exploring the Differences Between Chapter 7 and Chapter 13 Bankruptcy

Updated 5/16/22

A declaration of bankruptcy is a significant decision that can negatively impact your credit and finances. It’s a complicated process you shouldn’t take lightly by researching to figure out your best course of action.

Chapter 7 bankruptcy and Chapter 13 bankruptcy are perhaps the two most popular filed types of bankruptcy. Both are legal tools to relieve you of your financial burdens if you’re no longer capable of keeping up with minimum payments.

So which option is better for you? Well, it depends on your current financial position and future goals. Even though there are several differences between Chapter 7 and Chapter 13 bankruptcy, both options give you a fresh financial start.

How do they do this? Through a bankruptcy discharge. As the debtor in bankruptcy case, a discharge permanently bans all your creditors from attempting to collect their dues. It’s vital to check bankruptcy filings to see if your filing has gone through.


For instance, you can do a bankruptcy chapter 7 case number search if this is the option you chose. You can also check chapter 7 and student loans if you’re filing for student loan bankruptcy. Check out the review below to learn more.

Difference between chapter 7 and 13

Hearing the word “bankruptcy” can make anyone with debt feel anxious, but when you’ve considered filing already, hearing the word could also mean relief. Many people are unaware, however, that there are two different types of personal bankruptcy that they can file: Chapter 7 and Chapter 13. Knowing the difference between Chapter 7 and 13 may mean finding a better solution according to your needs, and typically, a bankruptcy attorney may be able to help you make this decision.

It can be confusing to know which type of personal bankruptcy to file for. Before speaking to a lawyer, read through some of the main differences between these two types of bankruptcy filings:

Chapter 7 Bankruptcy
Chapter 7 bankruptcy is sometimes referred to as liquidation. This process involves completely eliminating all bills — but the debtor also relinquishes his or her assets. This could mean having a home foreclosed upon or having a vehicle repossessed. Chapter 7 bankruptcy can apply to almost all types of debt, from credit cards and payday loans to medical bills and mortgages. This form of bankruptcy can stay on your credit report for 10 years.

Chapter 13 Bankruptcy
Unlike Chapter 7, where all debts are wiped out, Chapter 13 bankruptcy instead allows the debtor to develop a payment plan to pay back your creditors. This may or may not result in a reduction in the amount of debt a person carries. However, this type of bankruptcy makes it far easier to salvage assets, such as homes or cars.

Although the choice to file for Chapter 7 or Chapter 13 bankruptcy is ultimately up to you, it is best to discuss your option with a lawyer. You may also be urged to contact your creditors to see which options are available to you. No matter which type of bankruptcy you file for, be sure to worked with a firm of trusted bankruptcy attorneys who will find the right solution for you and your debt.

Have more questions about filing for bankruptcy? Contact a bankruptcy lawyer — and leave a comment below, too. References.

Idaho Legal News

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