Chapter 7: A chapter 7 discharges debt like credit cards, medical bills and personal loans while typically allowing someone to keep their home or car if they are current on the payment. A chapter 7 usually does not discharge debts like certain taxes, student loans, and tickets. If those are someone’s biggest concern, that person would usually file a chapter 13. For debts, secured by a home or car, a chapter 7 generally allows a person to choose what they want to do with that account. They can usually keep it if current on the payments. If they are behind on their payments they need to make a choice; get caught up, be willing to surrender the asset or file a chapter 13 bankruptcy.
Chapter 13: Chapter 13 is a consolidation of debt over a 3-5 year period and usually discharges at least some (sometimes almost all) of the debt when that 3-5 year period is over. This is sometimes for people who are looking to get help on catching up on home or car payments, who have homes or cars with excess equity, or who can reasonably afford to make monthly payment towards their debt. Most people who file a chapter 13 do so because they need help getting current on their home or car, they have excess equity in a home or car, or they simply have enough income to repay at least some of their debt. A chapter 13 usually allows the filer to keep all their property.