| Chapter 13 | Chapter 7 | |
| Short description: |
A repayment plan for individuals
with regular income and unsecured
debt less than $336,900 and secured
debt less than $1,010,650.
The debtor keeps his property and makes regular payments to the Chapter 13 trustee out of future income to pay creditors over time. |
The most common form of bankruptcy. It is a liquidation proceeding in which the debtor's non-exempt assets, if any, are sold by the Chapter 7 trustee and the proceeds distributed to creditors according to the priorities among creditors established in the Code. |
| How long will the case take? | A Chapter 13 Plan lasts 3-5 years, depending on the specific facts of your case | A Chapter 7 Bankruptcy is usually completed within 6 months. |
| Who can file? | Consumers, single or married, joint or individual cases. | Consumers and businesses. |
| How long does bankruptcy stay on my credit report? | 5-7 years from discharge; 10 years from date of filing. | 10 years from date of filing. |
| What happens if... | Chapter 13 | Chapter 7 |
| You're behind on your mortgage or car loan. | You can repay the arrears through your plan, over three to five years, and keep the house or car, so long as you keep current on the existing monthly payments. It may also be possible to remove a 2nd mortgage or pay less than the full balance on a vehicle. | You'll probably have to either give the house or car back to the creditor, but the Chapter 7 bankruptcy may allow you to stay in your home longer. |
| You owe back taxes to the IRS. | The past due amount must be paid in full through the Chapter 13 Plan. | You will need to make payment arrangements after the case is finished. |
| You have valuable non-exempt property. | You keep all of your property. | You may have to give it up some property, pay the trustee its fair market value or, if the trustee agrees, swap exempt property of equal value for it. |
| You have co-debtors on some debts. | The creditor may not seek payment from your co-debtor for the duration of your case. | The creditor may go after your co-debtor for payment. |
| You received a bankruptcy discharge within the previous four years. | No problem; you can file anytime. | You can't file for Chapter 7 unless it's been 8 years since your last Chapter 7 bankruptcy. |
| You want to keep secured property by paying the creditor its value. | You pay its replacement value (with interest) over time through your plan. | You pay the wholesale value in a lump sum. |
| Your disposable income is sufficient to fund a Chapter 13 plan. | N/A | The bankruptcy court might throw out your case or pressure you to convert it to Chapter 13. |
ARTICLES
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600 Seventeenth Street
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Denver, CO 80202
(303) 825-0197 Telephone
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Many factors must be considered when selecting which chapter of bankruptcy is right for you.
The consumer law specialists at The Gaschler Law Firm will guide you through the decision process. Here are a few basic guidelines to help you start thinking about which may serve you best!
Which Bankruptcy is Right for You?
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The Gaschler Law Firm LLC
