Which is Better – Chapter 7 vs. Chapter 13 Bankruptcy?
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:
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