CHAPTER 7 vs CHAPTER 13 BANKRUPTCY
Which is best for you?
Which works best for me?
There are two main ways to file bankruptcy and get debt relief, chapter 7 and chapter 13. Each has its benefits and limitations. Which one you choose or “qualify for” depends on:
- Your Finances
- Types of debt
- Your Income
Attorney Winger can help you quickly find the right option for you.
Note: Chapter 11 is similar to Chapter 13 in restructuring debt, but is primarily designed for businesses owned and controlled by more than one person (Example: LLC, partnership, corporation). See more…
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Note: Chapter 11 (business bankruptcy) is designed primarily for businesses owned and controlled by more than one person (Example: LLC, partnership, corporation). It is very similar to chapter 13 in restructuring debt. We currently do not handle chapter 11 cases, but if you are a single business owner (sole proprietorship), contact us to see if you qualify for a chapter 13, which is less expensive than filing chapter 11. Call or fill out the form bellow.
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| Chapter 7 | Chapter 13 | |
|---|---|---|
| Approach | Debt Elimination | Debt Restructuring |
| Summary | Certain debts can be completely eliminated in 3-5 months. Quickest method. | You still make payments to your lenders, but at a much lower and manageable payment schedule that keeps you or your business operating. |
| 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. |
