Chapter 7 Vs. Chapter 13 Bankruptcy: A Quick Comparison Chart

Confused about whether filing Chapter 7 bankruptcy or Chapter 13 bankruptcy would be better for you? Take a look at this handy chart to compare the most common scenarios for these two types of bankruptcy cases:

Straight BankruptcyConsolidation/Repayment Plan
You can no longer keep up with your monthly credit balances. Your income is less than your expenses.You have regular income and can afford your living expenses, but you need to restructure your debts.
You have little or no equity in your home, or you rent your home. Your home may be preserved under the homestead exemption if you can keep up with mortgage payments.You have more than $100,000 to $200,000 in equity in your home and you want to keep it. Your home may be preserved under homestead/marital exemptions or if you successfully complete a repayment plan.
You can keep your automobile in 99% of all cases as the automobile is exempt. Just maintain your regular monthly payments. Note: You may be able to pay fair market value - Talk to your bankruptcy attorney.You can pay the fair market value of the automobile over time rather than what you owe on the automobile; you can change the interest rates and monthly payments
Most debt gets eliminated (with some exceptions, such as student loans, taxes, and support obligations).You enter into a repayment plan to pay past-due debts over time. (Co-signers and marital property may be protected.)
The process takes as few as 3 to 5 months for most debt to be discharged.The process takes 3 to 5 years to catch up on arrears and pay all/portion of the debt owed.
Credit counseling is required within 180 days prior to filing.Credit counseling is required within 180 days prior to filing.
After filing, bankruptcy affects your credit score for as long as 10 years following the filing date.Even though the bankruptcy is on your credit report for 10 years, your credit will actually improve very quickly after your discharge. In fact, most prime rate home loans are available within just a couple of years after your case.

For more information about available bankruptcy options, contact bankruptcy attorney Kerry Denton at Denton Law Group at (619) 458-3739 for a free consultation.

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