Bankruptcy: Chapter 7 vs. Chapter 13

Bankruptcy: Chapter 7 vs. Chapter 13

When you’re contemplating bankruptcy filing, it pays to understand the differences between the types of chapters available to you. All will help you discharge or restructure your debts, but they have unique attributes that separate them all, and knowing them can help you figure out which will be right for you going forward. Of course, we recommend you contact James A. DeVita & Associates at (703) 351-5015 when you’re serious about getting started with the process, so that you get the professional expertise you need to come out ahead.

Before we look at whether or not Chapter 7 or Chapter 11 is right for you, let’s take a look at some facts that should help you make sense of the rest of our explanation below. These include:

  • When you file Chapter 7 bankruptcy you’ll have to liquidate any nonexempt assets to repay all eligible creditors.
  • Filing Chapter 13 bankruptcy gets rid of debts through an approved payment plan which allows you to repay over a 3-5 year period.
  • Both Chapter 7 and Chapter 13 bankruptcies are not perfect solutions. They will impact your credit and may not clear away all your debts.

About Chapter 7 Bankruptcy

Chapter 7 is what most people think of when they think of bankruptcy. This is what’s known as straight bankruptcy where you eliminate unsecured debt through the sale of assets. This unsecured debt includes things like personal loans and credit cards. Some assets may be considered exempt from this liquidation, but you’ll have to work with an experienced attorney to determine what’s included and what’s excluded.

Filing Chapter 7 will normally stop all collections against you, so the calls from creditors, the garnishing of wages, or any further lawsuits against you should come to a halt. The process will involve you meeting with creditors, under the watchful eyes of your attorney, to answer questions under oath. If all goes well, you’ll receive a discharge releasing you from all future liability for the debts in question. This means you can move forward with your life without the debt dragging you down.

About Chapter 13 Bankruptcy

A Chapter 13 bankruptcy filing is a bit different from Chapter 7 in that this is a reorganization plan meant to restructure your debt into something manageable going forward. This is not a discharge and will require you to stick to the repayment plan as constituted by your attorney during the bankruptcy process. This repayment plan is normally 3-5 years in length and allows you to keep assets making it ideal for anyone who can afford to repay some of their debt, but not all.


Like Chapter 7, Chapter 13 stops wage garnishment, creditor harassment and additional lawsuit filings connected to your debts. It may even help you stop foreclosure, so long as you continue to pay your mortgage. In short, Chapter 13 helps you eliminate debt while protecting your property from liquidation. If you can afford to repay some of your debt, this may be the right solution for you and your family.

An experienced attorney can explain the differences further should you still have questions – like James A. DeVita & Associates. We’re one of the highest rated bankruptcy firms in Northern Virginia, Maryland and Washington DC with more than 37 years of experience in the courts of the region. Call (703) 351-5015 and schedule your confidential bankruptcy consultation with the best attorney in the Beltway.