Which is Better – Chapter 7 vs. Chapter 13 Bankruptcy?
Updated 09/2021
The most common types of bankruptcies filed by individuals and small businesses are Chapter 7 bankruptcy and Chapter 13 bankruptcy. There are pros and cons to filing either type of chapter.
Generally, Chapter 7 bankruptcy is:
- Cheaper
- Faster
- Some debts are not discharged (forgiven) in Chapter 7 bankruptcy that are forgiven in Chapter 13
- You must qualify for Chapter 7 bankruptcy
- May lose assets if you can’t exempt (protect) them. Most people are able to protect all of their assets
In Chapter 13 bankruptcy:
- More costly than Chapter 7, but can be filed with only a small amount paid up front
- Can be used to catch up mortgage, car payment or other secured debt
- Takes 3 to 5 years
- Discharges more debt than Chapter 7
- Usually, no asset loss
- Limit on the amount of debt
Ready to find out whether bankruptcy can help you?
Complete our free, online debt evaluation form or call our office at (903) 759-5922. You can also email Carol@CrossStone.com. Find out if bankruptcy is your best option and whether it will help you.