Which is right for me?

Chapter 7 and Chapter 13 bankruptcy have different benefits for eliminating debt and are used for certain situations.

Which one you choose depends on your:

  • Finances
  • Types of debt
  • Income

Note: Chapter 11 is similar to Chapter 13 but for businesses owned and controlled by more than one person


 Chapter 7Chapter 13
SummaryDebt EliminationDebt Restructuring
Who files?Individuals & Some businessesIndividuals & Sole Proprietor businesses
Staying actions
Yes - Immediately put a hold on
most creditors collection activities
Yes - (same)
My AssetsBest for those with few assets.
May need to liquidate some assets.
Keep your home, vehicle, etc
My Bills
Dealing with Debt
Eliminate all unsecured debt
(loans not backed by assets, like credit cards, medical bills, utilities, etc.)
Adjusts debts for lower payments. Affordable payment plans with debts gone in 3-5yrs.
Income NeededBest for those with low incomeBest for those who can pay living expenses but not their current debts.
How long does it take?3-5 months, depending on your situation3-5 year plan to pay off debts
Who can file?
Pass the means test. A formula to see if your income is low enough, or if you need to file chapter 13.Must have enough income to meet your new obligations, minus certain expenses.

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