Chapter 7 vs Chapter 13
Comparison Chart
We’ve prepared this comparison chart so you can get a general idea of the major differences between Chapter 7 and Chapter 13. Every case is unique. When we meet with you, we’ll discuss your situation and make a recommendation based on your income, debts, assets, etc. The Bankruptcy Code is complex, and you need an experienced attorney like Robert Russell to help you navigate the nuances and avoid problems with your case.
| Feature | Chapter 7 | Chapter 13 |
|---|---|---|
| Garnishment and other collections | Stopped immediately and through the duration of the case. | Stopped immediately and through the duration of the case. |
| Preventing home foreclosure | Stops a Trustee’s Sale during the automatic stay. But you still have to come up with a plan to pay the mortgage arrears if you wish to keep the house. | Stops a Trustee’s Sale during the length of the case. Mortgage arrears can be included in the Plan, or eliminated completely. |
| Preventing vehicle repossession | Stopped upon filing, but payment arrangements must be made, or collection can resume when the case is discharged. | Stopped upon filing. You can repay the debt and arrears in the Plan. If you bought the car at least 2 years prior to filing, you might be eligible for a “cram down” option, which allows you to pay the amount the car is worth instead of the loan balance. |
| Length of Case | 3-4 Months | 36-60 months |
| Base attorney’s fees | $700 | $1,300 |
| Court filing fee | $335 | $310 |
| Credit counseling required | Yes | Yes |
| Required debt payments | Debtor pays debts that survive bankruptcy (e.g., car, home) directly and not through a Trustee | Yes, paid to the Chapter 13 Trustee, amount determined by your Chapter 13 Plan |
| Secured debts (house, car, furniture, etc.) | If you want to keep the property, you can reaffirm the loan contract and your payment will be the same. | Secured debts are paid through the Chapter 13 Plan and terms can sometimes be negotiated. |
| Unsecured debts (credit cards, medical bills, etc.) | Discharged | Discharged upon completion of your Plan. Whether these debts receive any payment depends on your Chapter 13 Plan. |
| Income Taxes | Older income taxes can be discharged. Please visit our FAQs for more information. Taxes that survive bankruptcy must be addressed by debtor directly with the tax authority. | Older income taxes can be discharged. Nondischargable income taxes must typically be paid through the Chapter 13 Plan. |
| Will I lose property? | Most people don’t have assets above the exemption amounts. However, if you do, it’s possible it could be seized by the Chapter 7 Trustee. | Typically, you don’t lose any property in Chapter 13. It’s a good option for people who have non-exempt property (like a lot of home equity). You may be required to pay the trustee a portion of your tax refunds. |
| Length of time on credit report | Typically 10 years | Typically 7 years |
| Non-Dischargeable Debts | Student loans, child support, and certain other debts | Student loans, child support, and certain other debts. However, you may be able to pay off the debt in the Chapter 13 Plan. |
| Ability to include post-petition debts | No | It’s possible to convert the case to Chapter 7 and include post-petition debts. |
| Future bankruptcy relief | You’ll have to wait 8 years after the filing date of the first Chapter 7 case before filing another case. | If you want to receive a discharge in Chapter 13 after previously filing for Chapter 13, two years must elapse between the filing dates. |
| Preferential Transfers (payments to friends and family within a period of time before filing) | A Chapter 7 Trustee may sue to recoup the money for distribution to creditors. | Ability to repay items over time without friends and family being sued. |
