Just Ask Jude

Yes. For more information on Chapter 13 bankruptcy, click here. For more information on Chapter 7 bankruptcy, click here.

If you can't afford to make payments on a payment plan then you are better off filing a chapter 7. Chapter 13 requires a payment plan to be set up and the debts to be paid over time. Chapter 7 liquidates the debts and you are done. You do have to pass a means test in order to file for Chapter 7. If you can afford to make payments and just don't want to, that is a different story.

The answer to this question depends entirely on your individual situation. A chapter 13 is not a detrimental to your credit rating, but you are responsible for making payments on the payment plan. The best way to get a correct answer to this question is to discuss your individual situation with a qualified attorney.

With Chapter 7 bankruptcy, you are asking the bankruptcy court to discharge all of your debts. In exchange, the trustee can take certain property to sell and distribute the proceeds to the creditors. Most chapter 7 cases are "no asset" cases, in which the court does not find any property available to take and sell. In chapter 7 bankruptcy you are allowed to keep a primary residence with limitations on the amoun of equity you can hold in that asset.

With Chapter 13 bankruptcy, you set up a payment plan to repay the debts over time. You do not lose your property in a chapter 13 bankruptcy, and you can possibly save your house if it is in foreclosure. You fund your repayment plan through your income.