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Chapter 7 & Chapter 13 Bankruptcy Differences

The Debt Vet at Bankruptcy Legal Counseling Center of Oklahoma > Chapter 7 & Chapter 13 Bankruptcy Differences

Determining the Difference Between Chapter 7 and Chapter 13 Bankruptcy

For more resources on filing bankruptcy, please check out The United States Courts. If you have any additional questions or would like to schedule a FREE consultation with DebtKillerOK.com, call us in Oklahoma City at 405-616-4949 or in Lawton at 580-354-9000.

What if: I am behind on my mortgage payments?

Chapter 7: You can discharge your mortgage debt, but the mortgage company can foreclose on your home.

Chapter 13: You can propose a repayment plan that allows you to keep your home.

What if: I am behind on my car payments?

Chapter 7: You can discharge your car loan debt, but the lender can repossess your car.

Chapter 13: You can propose a repayment plan that allows you to keep your car.

What if: I owe back taxes to the IRS?

Chapter 7: Certain types of older taxes can be discharged. Recent taxes and trust fund taxes (such as payroll taxes) cannot be discharged.

Chapter 13: Certain tax debts must be paid in full in your repayment plan. Some taxes can still be discharged.

What if: My income is above the Oklahoma median income for a family my size?

Chapter 7: You may not be eligible for Chapter 7 relief unless unusual circumstances exist.

Chapter 13: Your repayment plan will be based on your ability to repay your debts.

What if: I filed for bankruptcy a few years ago?

Chapter 7: You are not eligible for Chapter 7 if you received a bankruptcy discharge within the past 8 years.

Chapter 13: You can repay your debts through a repayment plan. However, if you received a Chapter 7 discharge within the past 4 years or a Chapter 13 discharge within the past 2 years, you can not receive another discharge.

What if: I owe mostly medical and credit card (unsecured) bills?

Chapter 7: You can discharge these debts (subject to your eligibility for Chapter 7).

Chapter 13: These debts can either be paid through a repayment plan or discharged.

What if: I am behind on my child support payments?

Chapter 7: Chapter 7 does not prevent the collection of past-due child support, including contempt proceedings.

Chapter 13: You can repay your past-due support debts in your repayment plan. You are required to remain current on continuing support payments.

What if: I own property that is not “exempt” (luxury goods, second homes, interests in businesses or investments)?

Chapter 7: Non-exempt property will be sold and the proceeds paid to your creditors.

Chapter 13: You can keep your non-exempt property by repaying your debts in Chapter 13.

What if: I owe money on student loans?

Chapter 7: Student loans cannot be discharged except in cases of “undue hardship.”

Chapter 13: Student loans cannot be discharged except in cases of “undue hardship.” Student loans are treated like other unsecured debts; you can repay them partially or in full depending on your ability to pay.

What if: I owe criminal fines or restitution?

Chapter 7: Chapter 7 will not protect you from collection of criminal fines or restitution.

Chapter 13: Chapter 13 will not protect you from collection of criminal fines or restitution.