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Is Chapter 13 bankruptcy a better choice than Chapter 7?

On Behalf of | Apr 22, 2020 | Bankruptcy

If you have financial troubles that have led to you falling into debt, you may consider filing for bankruptcy protection. Bankruptcy can allow you to avoid collections, resolve your debts and get your credit back on track. You will generally choose between Chapter 13 and Chapter 7 when you decide to file.

Chapter 7 bankruptcy is when the court wipes out your debts completely. Chapter 13 is where you create a repayment plan to pay back as much of your debt as possible. Both offer you protection from debt collectors and enable you to wipe out debt that you cannot pay. Some people think that Chapter 13 is the better option, and it does have some benefits over Chapter 7.

Main differences

According to the United States Courts, the main difference between the two types of bankruptcy is that in Chapter 13, you create a repayment plan. Both forms of bankruptcy require you to try to pay back your debts, but in Chapter 7, you will do this by liquidating your non-exempt assets. In Chapter 13, you get the chance to repay the debts over time without liquidating your assets to the same extent as in Chapter 7.


Chapter 13 will allow you to protect more of your assets than Chapter 7. You may be more likely to be able to save secured assets, such as your home. You also may be able to protect co-signers or joint owners of debts that you have from collection efforts. It also allows you to take care of your debts and repay creditors within your financial capabilities.