What is the difference between Chapter 7 and Chaopter 13?

I’m considering filing for personal bankruptcy but don’t know the law.

Asked on November 10, 2018 under Bankruptcy Law, Tennessee


M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 2 years ago | Contributor

Chapter 7 is a liquidation bankruptcy that wipes out most of your unsecured debts such as credit cards and medical bills without the need to pay back balances. Chapter 13 is a reorganization bankruptcy designed for debtors with regular income who have enough left over each month to pay back at least a portion of their debts through a repayment plan. Many debtors choose to file for Chapter 13 when possible since it offers many benefits not available in Chapter 7 (such as the ability to catch up on late mortgage payments).
Here is a link to an article that will explain further: https://bankruptcy-law.freeadvice.com/bankruptcy-law/bankruptcy-law/difference-in-bankruptcy-chapters.htm 

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