Penn Law Firm · Bankruptcy resources

Chapter 7 & Chapter 13

Understand your options before taking the next step.

Chapter 7

A path to debt relief.

Chapter 7 can discharge many qualifying debts without a multiyear repayment plan. A trustee reviews your finances and may sell property that is not protected by applicable exemptions to pay creditors.

Who may qualify?

Eligibility depends on your circumstances. For many people with consumer debt, income and allowed expenses are reviewed through the means test. Prior bankruptcy cases can also affect eligibility.

What should you consider?

Certain property may be protected by exemptions; other property may be at risk.
Not every debt can be discharged. Support obligations, certain taxes, and many student loans may remain.
A discharge does not automatically eliminate liens on property.

Source: U.S. Courts — Chapter 7 ↗

Chapter 13

A plan to move forward.

Chapter 13 allows eligible individuals with regular income to propose a court-approved plan to repay all or part of their debts, generally over three to five years.

How does it work?

You make plan payments to a trustee, who distributes funds to creditors. Your income, expenses, debts, and property help determine the plan requirements. Eligibility also includes statutory debt limits.

What should you consider?

A plan may allow you to keep property and catch up on past-due mortgage payments.
Ongoing mortgage payments must still be kept current.
You need sufficient income to meet the plan obligations. Missing payments can put the case at risk.

Source: U.S. Courts — Chapter 13 ↗

Which chapter fits your situation?

Discuss your income, debts, property, and goals with a bankruptcy attorney. Bring your ID, a utility bill, bank statements, and any documents required for filing. These summaries provide general information, not a determination of your eligibility or a promise of a particular outcome.

Before filing

Start with credit counseling.

Approved pre-filing credit counseling is generally required, subject to limited exceptions. The course assessment is separate from the Chapter 7 means test and from the debtor education course generally required before discharge.

View bankruptcy pricing →

Bankruptcy fees are separate from the course fee.

The $25 course fee does not cover filing for bankruptcy. A separate bankruptcy fee can be paid after completion of this course. View bankruptcy pricing.