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 Bankruptcy Comparison Chart:  Chapter 7 vs Chapter 13
Type of Debt Chapter 7 Chapter 13
Unsecured debt
Credit card, medical bills, car repossession, personal loans
Most debt is not paid back 1% to 100% paid back - Depends on plan
Secured debt
Car
Can keep vehicle if payments current and equity* position low; if kept, payments made directly to lien holder; can surrender without penalty Missed payments paid back in plan; if car kept, payments consolidated with other debts; can surrender vehicle
Secured debt
House
Can keep house if payments current & equity* position low; if kept, payments made to mortgage company; can surrender without penalty Late payments put in plan; main purpose of chapter 13 is to help keep house; regular payments made to mortgage company
Secured debt
Furniture

 

Can usually keep; if kept, payments made to lien holder; can turn in without penalty If kept, late payments and regular payments in plan; can turn in without penalty
Pending lawsuit and garnishments Stopped by filing Stopped by filing
Pending foreclosure
Stopped by filing
Harassing phone calls Stopped by filing Stopped by filing
Length Usually over in 4 to 6 months Lasts 3 to 5 years
Filing fee Paid up front $274.00 ($75.00 min. Paid up front)
Attorney’s fee ($201 up front)* Paid in plan over 36- 60 months
Examples Person with several thousand dollars owed in credit card bills and/or medical bills; person facing lawsuit and  garnishment arising from car repossession Person with several months behind on home or car note facing foreclosure or repossession; payment of back taxes
Advantages Gets rid of unsecured debt totally; case concludes in 4-6 months Allows debtor to save house or car when behind; very inexpensive to start case
Disadvantages Attorney’s fees and filing fees ($1300.00) must be paid in full within 60 days of filing; stays on credit report for up to ten years Debt is paid back in payment plan that lasts 3 to 5 years; stays on credit report for seven years

*equity - you can calculate your “equity position” in your home or car by the following formula: (market value of home/car - loan payoff) = equity position.  In other words, your equity in an item is how much cash you would keep if you sold your home/car and paid off all of the loans.

*Balance of attorneys fee due within 60 days of filing.