When someone is overwhelmed by debt and trying to decide if they should file bankruptcy, they may not know if they should file Chapter 7 or Chapter 13. Chapter 7 bankruptcy is quickly resolved, the proverbial slate is wiped clean, and consumers have a fresh start. On the other hand, Chapter 13 bankruptcy can take from three to five years to discharge. However, consumers can keep their homes and work out a plan to catch up on delinquent payments.
A bankruptcy trustee will review debts and place them in a certain priority. Some will need to be paid in full as soon as possible, such as taxes, spousal support and child support. Consumers will need to prove they can afford to keep their residence and vehicle.