Skip to Content

What is the difference between Chapter 7 and Chapter 13 Bankruptcy?

Bankruptcy is a proceeding in a federal court in which an insolvent debtor’s assets are liquidated and the debtor is relieved of further liability. If you have contacted a credit counseling agency or an attorney and they have determined that the best possible debt solution for you is bankruptcy counseling, you might be wondering what your next steps should be. The major decision when a consumer files bankruptcy is whether they should chose a Chapter 7 or a Chapter 13 filing. This video will teach you the differences between Chapter 7 and Chapter 13 bankruptcy so you can make the most informed decision.

You are mandated to participate in a pre-bankruptcy counseling session as well as a post-bankruptcy debtor education course. ACCC is approved by the Department of Justice to provide both courses and a bankruptcy certificate that will be necessary to have your bankruptcy discharged. 

David Iavarone: The major difference when a client files personal bankruptcy is whether they should choose a chapter seven or a chapter 13. A chapter seven is mainly known as a fresh start. That's what individuals can discharge all their unsecured debt so they're no longer liable for them, whereas with a chapter 13, it's a reorganization plan where clients work out a budget plan to pay back some or all of their unsecured debt. With this plan, they must have some source of regular income and be able to pay a portion of it to their debts. 

ACCC provides links to other services but does not endorse non-ACCC websites or validate their content.

American Consumer Credit Counseling (ACCC) is one of the top nonprofit debt consolidation companies in the U.S., with more than 22 years' experience helping individuals and families consolidate credit card debt and improve their credit management skills. If you're wondering "How does debt consolidation work?" and "How can I consolidate my bills?", we can provide you with debt consolidation information to show you exactly how we can help you consolidate debt without having to borrow money or pay steep fees. If you're considering bankruptcy, we are also one of the approved credit counseling agencies for issuing a pre-bankruptcy certificate as well as providing the post-bankruptcy credit counseling course.

SiteLock Better Business Bureau Mass Housing Approved National Industry Standards for Homeownership Education and Counseling NFCC Member