CHAPTER 7 vs CHAPTER 13
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 7 | Chapter 13 | |
|---|---|---|
| Summary | Debt Elimination | Debt Restructuring |
| Who files? | Individuals & Some businesses | Individuals & Sole Proprietor businesses |
| Creditors Staying actions | Yes - Immediately put a hold on most creditors collection activities | Yes - (same) |
| My Assets | Best 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 Needed | Best for those with low income | Best for those who can pay living expenses but not their current debts. |
| How long does it take? | 3-5 months, depending on your situation | 3-5 year plan to pay off debts |
| Qualification 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. |