Chapter 7 vs Chapter 13
Which is right for you?
Whatever your financial hardship, there is likely to be a chapter in bankruptcy law that works
for you. Whether it be from loss of a job, divorce, overwhelming medical debt, credit card debt, an unaffordable mortgage, inflation impacting your ability to pay your bills; we will work with you on finding the right one.
Chapter 7
- Fast Discharge ( ~ 4 months )
- No repayment plan
- Eliminates unsecured debt
- Discharge of personal liability
Chapter 7 is intended for consumers, or consumers with LLCs. It is generally the quickest chapter to file; depending on the speed with which we are supplied with the information requested it can be done in as little as three months.
3 - 5 year structured payment plan -
Catch up on mortgage and car loan -
Protects assets -
No creditor vote or veto -
Chapter 13 provides you with an opportunity to propose a plan that can accomplish many beneficial results and also may require that you make certain payments to your unsecured creditors during the plan.
You may apply for a discharge of any balance remaining of your unsecured debt, which sometimes is 100% of it at the time your plan has been completed.
Chapter 13
Chapter 11
SubChapter 5
- No debt limits
- Greater reorganization opportunities
- Expensive and complicated
Generally speaking Chapter 11 is intended for business bankruptcy. However, even if your debt is all consumer debt, Chapter 11 may be the way to go if your debt exceeds the limits of Chapter 13.
If your total secured or total unsecured debt exceed specified levels, which may include personal and/or business debt for which the individual is liable, Chapter 11 may work best for you. These levels change every three years; currently they stand at unsecured debt of $526,700; secured debt at $1,580,125. These levels will change again on April 1, 2022.
All bankruptcies begin with a Means Test. This test is a determination of which bankruptcies you are eligible for, and is determined based on income, expenses, secured debt, and other factors.
If you are uncertain if you wish to pursue bankruptcy due to not knowing which chapter you can file, we can do a Means Test for you. Should you choose to then file, we apply payment for the Means Test to your bankruptcy invoice.