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Frequently Asked Questions

The main differences between chapter 7 and 13 bankruptcy The main differences between chapter 7 and 13 bankruptcy

What's the difference between Chapter 7 and 13?

Jan 27 2017

The simple answer is to explore chapter 13 if your bankruptcy objectives are incompatible with the restrictions of chapter 7. Compared to chapter 7 chapter 13 has:

  • A longer term
  • A repayment plan
  • The ability to change the terms of a loan
  • Unsecured dividend

The primary reason people file for chapter 13 bankruptcy is because they are past-due on a secured debt. Often secured creditors will not negotiate an affordable repayment plan leaving the collateral in jeopardy. Creditors are not obligated to offer payment terms outside the promissory note. Chapter 13 bankruptcy laws can modify the note.

Over Means

An over means debtor makes too much money to qualify for chapter 7, but is still eligible for chapter 13 bankruptcy relief. Unlike chapter 7, at the heart of each chapter 13 lies a repayment plan. This repayment plan is a contract between the debtors and their creditors. Each repayment plan is different, but for those debtors who are over means, it must include a dividend for general unsecured creditors like credit cards.

Chapter 13 Repayment Plan

Your chapter 13 bankruptcy plan is as unique as your financial situation. The three main parts of each chapter 13 plan in Massachusetts are:

  • Duration from 36 to 60 months
  • Creditors to be paid
  • Payment terms

The key factors that will determine the specifics of your chapter 13 plan are:

  • Your financial objectives
  • Your cash flow
  • Your attorney

In each chapter of bankruptcy our firm works closely with our clients to maximize the financial benefit.


Be sure to check our F.A.Q. chapter 7 and 13 pages for more information.

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Carmenelisa Perez-Kudzma

Practicing law is my passion. At age eight a presidential speech motivated me to pursue my dreams of becoming an attorney. My singular purpose is to effectively represent my clients in the court of law.

Website: www.pklaw.law
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