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We often recommend choosing a “Chapter 7” bankruptcy when your debts are mainly credit cards, medical bills, or personal loans:

• Chapter 7 allows you to “discharge” most of these sorts of unsecured debts so that they’re eliminated entirely.
• With a Chapter 7, your credit score can improve quickly, sometimes within months.
• You can often keep important things you own—like your house and car—when you file a Chapter 7.

But a Chapter 7 doesn’t work for every situation. For instance, you may not be able to keep some “extra” things you own, like a second car or an anticipated tax refund. And if you make too much money, you may not qualify for a Chapter 7.

So in some cases, we recommend choosing a “Chapter 13” bankruptcy:

• Chapter 13 allows you to pay back your debts over five years, and gets you “current” on those debts.
• With a Chapter 13, you pay 0% interest on “unsecured” debts—like credit cards—that often have high interest rates.
• If you qualify, you may be eligible to pay pennies on the dollar to those unsecured creditors, or even avoid repayment altogether.
• You can keep all of your assets, although you may have to pay extra to keep some of them.

However, if you choose a Chapter 13, you’re also agreeing to certain restrictions. For instance, without the court’s permission, you can’t rack up new debt or sell certain assets for up to five years.
There are pros and cons for both Chapter 7 and 13, so nobody can say that one is always better than the other. The choice really depends on your situation.

A good bankruptcy lawyer can help you make the right choice for your situation. So call us now at (818) 661-2596—or fill out the form on this page—to schedule a FREE consultation on what kind of bankruptcy is right for you.