What Is The Difference Between Chapter 7 and Chapter 13 Bankruptcy?

Chapter 7 Bankruptcy is a straight forward procedure for eliminating past debts. It generally eliminates all debts except taxes, student loans, child support, and criminal fines and penalties, and is processed and completed relatively quickly.

Chapter 13 Bankruptcy is a payment plan that lasts three to five years. Debts are repaid in whole or in part under a protected plan.

Choosing between the two bankruptcies is like choosing between two different tools to fix two different problems. At Mile High Bankruptcy, we always start the analysis with Chapter 7, which is faster and cheaper. Over 95% of the people who contact us qualify for Chapter 7.

If you make too much money, or have specific issues that disqualify you for Chapter 7, we then turn to the analysis of chapter 13. One important consideration for chapter 13 is income stability—you have to be able to have steady income necessary to support your plan for three to five years or the plan can be dismissed and you will not receive a discharge of your debts. We filed Chapter 13 bankruptcies for over fifteen years, but no longer do so as we specialize now exclusively on filing Chapter 7. We do, however, discuss both options with all clients, and have an excellent referral network where we can find clients needing Chapter 13 a competent attorney to process their case.

The issue of which bankruptcy to choose is relatively simple once the facts of a persons problems and life issues is properly analyzed by an experienced bankruptcy attorney.

Call me, Peter Milwid, at 303-831-0733, if you wish a free consultation to help decide what’s best for you.