Is it better to file Chapter 7 or Chapter 13 bankruptcy?
There is no one right answer as to whether it’s better to file Chapter 7 or Chapter 13 bankruptcy. The best choice depends on your financial circumstances and your goals.
Each type of bankruptcy has relative advantages and disadvantages. Which type is best is a matter of deciding which advantages apply to your situation.
The primary advantage of Chapter 7, for example, is that all of your unsecured debts are discharged. However, you may have to give up some of your assets. For that reason, Chapter 13 is a better choice for some people.
Chapter 13 is essentially a repayment plan, and it doesn’t require you to give up any of your property. Also, it avoids foreclosure, enabling you to keep your house even if you’re behind on your mortgage payments.
A potential disadvantage of Chapter 13 bankruptcy is that you debts are not discharged until the payment plan is done, which could be as much as 5 years. With Chapter 7, by contrast, your debt is discharged within 3 to 5 months.
An experienced bankruptcy attorney can help you understand the differences between Chapter 7 and Chapter 13 bankruptcy and advise you on which is more beneficial to you given your financial circumstances and current debt.