Comparing Chapter 7 and Chapter 13 Bankruptcy
There are two main types of bankruptcy relief that consumer debtors can benefit from: Chapter 7 and Chapter 13.
The first type of consumer debt relief is known as Chapter 7 Bankruptcy. A Chapter 7 filing allows consumer debtors to discharge most, if not all, of their debts in one fell swoop. Chapter 7 even gives you the choice of walking away from car loans and/or mortgage payments that are harming your financial well-being.
The second type of consumer debt relief is known as Chapter 13 Bankruptcy. A Chapter 13 filing allows debtors with either more income, or equity in their assets, to design a carefully structured repayment plan. The repayment plan is paid over a course of 3-5 years, in order to give clients some breathing room to reorder their financial affairs. At the end of the plan, a consumer debtor obtains additional debt relief when your remaining debts are discharged.
Both of these plans provide comprehensive debt relief, but are designed to achieve your debt relief goals differently. It is important that you speak to a competent, knowledgeable bankruptcy attorney before deciding which type of bankruptcy relief is right for you.