Chapter 7 versus Chapter 13 bankruptcy | The Colpitts Law Firm
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Bankruptcy May Be Your Option

Chapter 7 versus Chapter 13 bankruptcy

It is easy to become overwhelmed with debt. If a person loses a job, he or she may be forced to live on credit cards while searching for another position. Even when those who have a job may be so far behind on card payment that they will never be able to catch up. In some cases, a person in Oklahoma may experience a serious illness or injury, and between lost wages and medical expenses, may be swimming in debt. Many in similar circumstances often wonder whether Chapter 7 or Chapter 13 bankruptcy might be the best option for them.

There are many benefits to seeking debt relief through a bankruptcy filing, but some people are confused about the differences between the different personal bankruptcy options. In Chapter 13 bankruptcy, all or most of the person's debts will be consolidated into one payment. Certain debts, such as utility bills, could be excluded for the repackaging. The typical length of the repayment plan is five years but could be completed in as few as three years. While such a filing will impact a person's credit rating, the flag regarding it is typically removed from the report after seven years.

A Chapter 7 bankruptcy filing has a different result. If successful, as approximately 96 percent of filings reportedly are, the petitioner will receive a complete discharge of his or her unsecured debt. The process can typically be completed in a matter of months as opposed to a Chapter 13 filing. However, the flag on the person's credit report is typically not removed for 10 years.

Many people struggling with debt in Oklahoma are overwhelmed. While there are options for debt relief, some are unaware of the different types of bankruptcy protection. An attorney with experience with such proceedings can help consumers determine whether filing is in their best interests, and if so, whether to seek Chapter 7 or Chapter 13 bankruptcy protection.

Source:, "Bankruptcy: What's the Difference Between Chapter 7 and Chapter 13?", Paul Kiel, Sept. 27, 2017

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