Chapter 7 Vs. Chapter 13: What Are The Differences?

Learning about the many intricacies of bankruptcy is daunting for anyone. When it comes to determining whether to file Chapter 7 vs. Chapter 13, you should have the counsel of a bankruptcy attorney to guide you.

At Kaeding Law Office, PLC, I am here to help you understand your options and make informed decisions. I’m Kristina Kaeding, a consumer bankruptcy attorney based in Council Bluffs, serving the people of Iowa and Nebraska. I devote my entire practice to bankruptcy law, so I have the detailed knowledge that you need. Whether you are grappling with medical debt, business challenges or family financial struggles, I am here to advise you and answer your questions about bankruptcy. I make sure that I am approachable and welcoming to everyone, ensuring that you feel supported throughout your journey.

What To Know About Chapter 7 Vs. Chapter 13 Bankruptcy

There are two main categories of bankruptcy for individuals – Chapter 7 and Chapter 13. When you are considering filing bankruptcy, you should take the time to learn about each option. This is a broad overview:

• Chapter 7: Often called liquidation bankruptcy, Chapter 7 lets you discharge the majority of unsecured debt you have accrued. You may need to sell some of your assets to repay your creditors. However, many essential assets are exempt. This is ideal for individuals with low income and few assets who want a fresh start quickly.
• Chapter 13 bankruptcy: Known as reorganization bankruptcy, Chapter 13 enables you to keep your assets while repaying your creditors through a payment plan. It is suitable for individuals who continue to make an income with which they can afford to make payments every month.

I am knowledgeable in both Chapter 7 and Chapter 13 bankruptcy laws. I can help you determine which option is best for your situation.

What Are The Benefits And Drawbacks Of Chapter 7 Vs. Chapter 13?

Each form of bankruptcy has its positives and negatives. The benefits of Chapter 7 include:

• Quick discharge: Debts can be discharged in as little as a few months.
• Immediate relief: Stops creditor harassment almost instantly.
• Fresh start: Clears most unsecured debts.

However, some of the drawbacks of Chapter 7 include:

• Asset liquidation: You may have to sell nonexempt assets.
• Credit impact: It remains on your credit report for up to 10 years.
• Eligibility: Not everyone qualifies; you must pass a means test.

If you are considering Chapter 13, here are some of the benefits:

• Asset protection: You can keep your personal property.
• Debt repayment: Allows you to pay off debts over time.

You should also understand the downsides, such as:

• Longer process: Repayment plans last three to five years.
• Income commitment: Requires a regular income to meet payment obligations.
• Greater complexity: The process can be more complicated.

When you work with Kaeding Law Office, PLC, you’re choosing a partner who listens and understands your unique situation. I can help you explore which type of bankruptcy is right for you and guide you through the filing process.

Ask A Bankruptcy Lawyer About Chapter 7 Vs. Chapter 13

At Kaeding Law Office, PLC, I can help you stop creditor harassment and regain control of your finances. Contact me at 712-847-5882 or send me an email to schedule a free, confidential consultation. Virtual consultations are available.