Choosing Chapter 13 Over Chapter 7 Bankruptcy

While Chapter 7 is the more popular form of bankruptcy, effectively eliminating all of your qualifying debt without having to make a repayment plan. Chapter 13 bankruptcy with a court-approved repayment plan offers more flexibility and more options than Chapter 7.

Keep Your Assets

Chapter 13 bankruptcy allows debtors to catch up on missed payments and keep their cars and houses as well as the rest of their assets. Often in chapter 13, you will pay little or nothing to your unsecured creditors in your repayment plan. When filing Chapter 7, you could potentially lose your house or your car if they are not covered under the exemption rules.

Frequently in Chapter 13 bankruptcy, car payments can be lowered due to the change of the interest rate on the vehicle loan. Chapter 7 does not offer this choice.

Four Years Instead of Eight

When you receive a Chapter 7 discharge, you must wait eight years before you can obtain another discharge to eliminate your debt. With Chapter 13, you may only need to wait four years to file bankruptcy again.

Chapter 13 bankruptcy also may look more favorable to future lenders when they see that you paid back your debt over time, instead of wiping it out as in Chapter 7.

If you have questions whether Chapter 7 or Chapter 13 is the best choice for you, contact a Dallas bankruptcy attorney to discuss your options.