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The biggest difference between Chapter 7 and Chapter 13 is that Chapter 7 focuses on discharging (getting rid of) unsecured debt such as credit cards, personal loans and medical bills while Chapter 13 allows you to catch up on secured debts like your home or your car while also discharging unsecured debt.
It's a Long Term Commitment ? Filing Chapter 13 bankruptcy requires you to make a long-term commitment to the process. Tough To Get Credit or a Mortgage for 7 Years ? Other impacts include the inability to get credit cards at a good rate, and filing Chapter 13 makes it tough to get a mortgage.
Chapter 13 Bankruptcy is also known as a ?reorganization?, because it allows for the repayment of debt over a three to five year period. Payments are based upon your disposable income, which is the income left over after you pay your necessary monthly expenses.