Bankruptcy is confusing for many people. Things get even more confusing once the differences between chapter 7 and chapter 13 bankruptcy come into play. So what exactly is bankruptcy, and how are chapter 7 and chapter 13 different? If you face an insurmountable amount of debt, how might bankruptcy affect you? These are some of the questions we will answer here.


Bankruptcy is the legal process of erasing all unsecured and managing other debts that you are unable to repay. This includes credit cards, personal loans, and medical bills. If you have a large amount of debt that is impossible to pay back due to low income, job loss, illness, divorce, or other circumstances, bankruptcy may be a good option for you. Keep in mind that bankruptcy does not erase debts due to child support or certain tax situations. Let’s discuss the differences between chapter 7 and chapter 13 bankruptcy.


If you want to clear your debts as fast as possible, Chapter 7 bankruptcy is a good option. It is especially beneficial if you have little disposable income after paying for basic household expenses and usually takes anywhere between three to five months to complete. To file for chapter 7 bankruptcy, you need to pass the means test to determine your income level and whether or not you can afford to pay your debt back.

One of the major benefits of chapter 7 bankruptcy is that you are not required to make repayments towards your debt. Creditors and collection agencies will also be unable to contact you or garnish your wages to fulfill your debt.

Chapter 7 bankruptcy does not likely involve selling some or all of your eligible assets to satisfy your debt. These requirements differ from state to state, which is why it’s important to consult with a lawyer before filing for any form of bankruptcy.


Chapter 13 bankruptcy is only available to individuals, whereas chapter 11 extends to businesses as well. Unlike chapter 7, if you file for chapter 13 bankruptcy, you are required to follow a repayment plan based on the court’s decision. This process typically takes between 3-5 years – significantly longer than a chapter 7 bankruptcy. 

Since you repay some or all of your debts over time with chapter 13 bankruptcy, you can potentially keep your assets after the debt is repaid. Another benefit of chapter 13 is that the process looks better to potential creditors, and only remains on your credit report for 7 years instead of 10.

The major con for filing chapter 13 bankruptcy is that you do have to repay some or all of your debts, which can seem overwhelming. But the ability to keep your home or car may very well outweigh your desire not to pay back your debt, and lose your assets in the process.


Looking for legal advice on chapter 7 or chapter 13 bankruptcy? Call or email Attorney David Brunelle today. We look forward to helping you!