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John T. Turco & Associates PC, LLO

What Type of Bankruptcy Do I Qualify For and Which One is Best for My Situation?

If you are considering bankruptcy, you may be wondering whether you qualify and which option is best for your situation. You may have heard legal terms like Chapter 7 and Chapter 13, but you really don’t know the difference between the two and which one might work best for you and your family.

Let’s review both types of bankruptcy to help you decide which one might be best for your unique situation.

Table of Contents
  • Types of Bankruptcy: Chapter 7 vs. Chapter 13
    • Differences Between Chapter 7 and Chapter 13 Bankruptcy
  • Weighing the Advantages of Chapter 7 and 13
  • Ask for Professional Help
    • Schedule a no-cost consultation today!

Types of Bankruptcy: Chapter 7 vs. Chapter 13

There are two main types of bankruptcy for individual consumers under the United States bankruptcy laws:

Chapter 7 Bankruptcy

  • This is often referred to as a liquidation.
  • This type of bankruptcy allows you to cancel your eligible debts without entering into a payment plan.
  • It may involve selling off some assets.
  • There is a means test that must be met.
  • Your income must be below a certain amount for you to file Chapter 7.

Chapter 13 Bankruptcy

  • This is often referred to as a reorganization.
  • This type of bankruptcy allows you to partially repay your debts over the course of three to five years.
  • Some remaining debts may be discharged at the end of the process.
  • To qualify for Chapter 13, you need enough regular income to participate in a payment plan.

While many people are concerned about whether they will qualify for bankruptcy, almost everyone who has debts they cannot afford to pay will be able to qualify under at least one chapter.

Differences Between Chapter 7 and Chapter 13 Bankruptcy

Chapter 7Chapter 13
Type of BankruptcyLiquidationReorganization
Stop Collection ProcessYesYes
Minimum DebtNoneNone
Maximum DebtNone$465,275 Unsecured Debt
$1,395,875 Secured Debt
Eligibility RestrictionsPass Means Test
No "discharged" in prior Chapter 7 in the last 8 years or Chapter 13 in the last 6 years.
Regular Income
No "discharged" in prior Chapter 7 in the last 4 years or Chapter 13 in the last 2 years.
What happens to unsecure debt like credit cards or medical bills?Can be Fully RemovedMust Pay Back Some Debt Over Time
(Minimal to 100%)
What happens to secure debt like a house or car?Varies, but fewer options.
Must be careful that the Trustee doesn't take assets.
Must pay debt in full per contract to keep.
No right to catch up on back payments over time.
Varies, but your choice with more options.
Possibly pay less than owed for a vehicle at lower interest rate.
Right to keep house and car and catch up payments over years.
Must be able to make necessary monthly payments.
Each case/plan is customized per your goals.
Credit CounselingRequiredRequired
How long does it take to receive a discharge?3-4 Months (Typical)3-5 Years Plus a Month or Two (Typical)
Time Spent on Credit Report10 Years7 Years

Weighing the Advantages of Chapter 7 and 13

Many people qualify for both major types of consumer bankruptcy. If this applies to you, then you will need to decide not only whether to file bankruptcy but also which type to file. Although it is sometimes possible to convert one type of bankruptcy to the other, it can be difficult.

It helps to ask yourself why you are thinking about filing bankruptcy:

  • Are you trying to avoid foreclosure?
  • Are you trying to stop harassment by debt collectors?
  • Are you in trouble with debt because of back taxes, divorce, or troubles with your small business?

In each case, one or the other type of bankruptcy may be more helpful.

Ask for Professional Help

Our experienced bankruptcy lawyers can help you sort out your options and determine which bankruptcy chapter offers you the best protection, given your individual goals. We service clients throughout Nebraska and Iowa and we are here to help.

Contact us to speak to one of our experienced bankruptcy lawyers or to arrange a free initial consultation. If you cannot come to our Omaha offices, we can consult with you by telephone.


“I couldn’t be more happy with John Turco’s entire office. They made this a very easy, painless and quick experience during an otherwise difficult time in my life. Thank you guys so much for all the work you did. You made a dramatic difference in the quality of life for me and my son. I’m truly grateful. If anyone is on the fence of which law firm to choose, I highly recommend John Turco and Associates.”
– Cory D.

Schedule a no-cost consultation today!

We believe in fostering positive, long-term relationships with our clients. Contact us to find out how we can help you achieve the success you deserve.

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We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.


This site is not intended to constitute legal advice, nor does it create an attorney-client relationship. The materials on this site are not guaranteed to be complete or current, and they should not be relied on as a substitute for legal advice. This site conveys general information related to bankruptcy law in Omaha, Papillion, Bellevue, Gretna, Council Bluffs and surrounding communities. If you are contemplating or involved in any matter in which legal advice or other expert assistance is required, the services of a competent professional should be sought. The determination of the need for legal services and the choice of a lawyer are extremely important decisions and should not be based solely upon advertisements or self-proclaimed expertise. This disclosure is required by rule of the Supreme Court of Iowa. Memberships and offices in legal fraternities and legal societies, technical and professional licenses, and memberships in scientific, technical and professional associations and societies of law or field of practice does not mean that a lawyer is a specialist or expert in a field of law, nor does it mean that such lawyer is necessarily any more expert or competent than any other lawyer. All potential clients are urged to make their own independent investigation and evaluation of any lawyer being considered. This notice is required by rule of the Supreme Court of Iowa.

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(402) 933-8600
  • Free Bankruptcy Consultation
  • Home
  • About
    • Meet Our Bankruptcy Lawyers
    • Client Reviews
  • Bankruptcy & Debt Relief
    • Chapter 7 Bankruptcy
    • Chapter 11 Bankruptcy
    • Chapter 13 Bankruptcy
    • Small Business Bankruptcy
    • Bankruptcy and Divorce
    • Car Loans and Repossessions,
    • Credit Card Debt and Personal Loans
    • Foreclosure Assistance
    • Gambling Debt
    • Lawsuits and Garnishments
    • Liability Claims and Lawsuits
    • Medical Bankruptcies
    • Student Loan Debt Relief
    • Unemployment and Disability
    • Unpaid Taxes
  • Bankruptcy 101
    • Understanding Bankruptcy
    • What Type of Bankruptcy Do I Qualify For?
    • How to File for Bankruptcy
    • Life After Bankruptcy
    • Debt Collection Practices
    • Credit Reporting Practices
  • Client Resources
  • Blog
  • Contact
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