The internet can provide a wealth of information regarding virtually any topic, but the vast amount of information can also become detrimental. When you need concise answers and knowledgeable feedback, reading hundreds of articles is too overwhelming and will likely cause confusion, not inspire clarity. It is imperative to cut through all the noise and find the simple facts you need when it comes to financial issues. One of the most confusing aspects of filing bankruptcy is determining which type of bankruptcy (Chapter 7 or Chapter 13, typically) is right for your situation. Discussing your financial issues, goals, and the desired outcome with a bankruptcy attorney- as well as your prospects for income and repayment – can help you to make the right decision.


Chapter 7 and Chapter 13 bankruptcies have several differences that will affect how you move forward. With that in mind, here are six fast facts about Chapter 13 bankruptcy – clear and to the point.

If you need further information, call an experienced bankruptcy attorney.

Chapter 13 Bankruptcy FAQs

  1. Chapter 13 Bankruptcy Involves Repayment of Debt
    There are several versions of bankruptcy, each offering the debtor a different method of attacking their obligations. While some bankruptcies require you to sell your property to settle your debt, Chapter 13 bankruptcy does not eliminate the debt of assets you wish to keep. Instead, the trustee establishes a practical repayment plan to repay creditors some or all of the debt while you hold the asset.
  2. Chapter 13 Bankruptcy Allows You to Retain Property
    Chapter 13 bankruptcy allows a debtor to retain most, if not all, of their assets. This is not the case with Chapter 7 bankruptcies, during which property is sold to pay off debt obligations.
  3. Chapter 13 Filing Provides an Automatic Stay
    An automatic stay immediately ceases any repossession or foreclosure efforts while the bankruptcy terms are decided. This stay is effective as soon as the bankruptcy petition is filed. While the stay is temporary, it does allow for working out a plan of action without harassment or stress from creditors. In fact, creditors must refrain from contact unless the court agrees to lift the stay on their behalf. A bankruptcy attorney can advise on this possibility.
  4. The Court requires Credit Counseling for Chapter 13
    In most cases, the filing party must attend approved pre-bankruptcy credit counseling and pre-discharge debt education. These courses are typically conducted online or over the phone.
  5. Chapter 13 May Protect Consumer Debt Co-Signers
    Agreeing to become a co-signer on a debt may pose a significant risk, but Chapter 13 bankruptcies contain protections for co-signers. This special provision of the automatic stay applies to ‘consumer debt,’ or debts incurred for a “personal, family, or household purpose.”
  6. Spouses Can File Joint or Individual Petitions
    An experienced bankruptcy attorney is a valuable source of information when married couples face bankruptcy. The best course of action may be to file jointly – but in some scenarios, filing an individual petition may be better for your financial position. Both types of filing are possible, so discussing these options during the initial consultation is essential to achieving the best outcome.

Is Bankruptcy The Right Option for Your Situation?

If you are in financial trouble and don’t know where to turn, a consultation with a bankruptcy attorney is the best place to begin. If you live in the Sarasota area and need advice, call the bankruptcy law offices of Richard V. Ellis.

Mr. Ellis has helped hundreds of area residents to recover from financial crises and get on with their lives.