What to know the difference between Chapter 7 vs Chapter 13 bankruptcy? Chang & Diamond, APC, bankruptcy attorneys in San Diego County, can help.


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Bankruptcy filing is an important decision that can have certain negative effects on your finances and credit report. When facing financial difficulties, it’s crucial to know how bankruptcy works before deciding to file a bankruptcy petition.

There’s no doubt that if you’re experiencing severe debt problems, filing for bankruptcy can help you get back on your feet. It will stop most creditors from continuing their collection activities. It will also eliminate many types of debt, but it doesn’t wipe out all obligations.

If you do ultimately decide to file, one of the first decisions you’ll have to make is whether to file Chapter 7 or Chapter 13 bankruptcy. Chapter 7 or Chapter 13 refer to sections of the U.S. Bankruptcy Code. This code outlines what will happen with your debt and how.

Bear in mind that bankruptcy can be a complex procedure. You may require help from a skilled bankruptcy attorney who can help you decide the best option for you.

Chapter 7 Bankruptcy

Simply put, Chapter 7 bankruptcy (also known as straight or liquidation bankruptcy) discharges all unsecured debt and liquidates nonexempt assets. In some cases, exemptions can be made utilized to preserve and protect your property.

Chapter 7 is uncomplicated and fairly the most straightforward bankruptcy process.

Chapter 7 can be the only way to stop the damage, save your credit and protect your wages and property, especially when:

You are buried in debt;

Facing garnishment;

Facing seizure, and creditor harassment;

Fearing foreclosure or repossession of property.

However, to file a Chapter 7, the debtor has to pass a means test. If their household income falls below certain income levels in the specific state, they will pass and get the chance to eliminate unsecured debt, such as medical bills and unpaid credit cards. The test is the government’s way of checking that the bankruptcy system is not abused.

At Chang & Diamond, APC, we realize that you have many questions and fears. You may wonder if all debt will be discharged, if your credit rating will be ruined forever, or if the stigma of a Chapter 7 bankruptcy declaration will haunt you for the rest of your life. Let our attorneys discuss the specifics of Chapter 7 with you and help you make a fresh start.

Chapter 13 Bankruptcy

Chapter 13 is known as a reorganization bankruptcy. It looks at the debtor’s financial life but focuses more on dealing with any secured debt they are behind while discharging most unsecured debts.

Unlike Chapter 7 bankruptcy, Chapter 13 reorganizes unsecured all of your existing debt, allowing you to devise a three- to five-year court-approved repayment plan to restructure your debt and achieve financial freedom.

Far from making you a pariah, Chapter 13 bankruptcy may just be the smartest financial move you can make. Many of our clients have restored the health of their finances and have found economic stability. Remember, bankruptcy is nothing more than financial strategy.

If you would like to capitalize on the experience and knowledge of our bankruptcy attorneys and determine whether Chapter 7 or Chapter 13 bankruptcy is right for you, contact our San Diego & Riverside County office today and schedule a free initial consultation.



Most individuals who file for bankruptcy choose Chapter 7, especially if they meet the eligibility requirements. It’s a popular choice because it doesn’t require individuals to pay back debts.

Chapter 13, on the other hand, makes more sense if, for example, an individual is behind on their mortgage and wants to keep their house. They can repay the missed payments of unsecured creditors over time. It also allows fillers to repay secured debts over three to five years.




A significant part of our practice is educating clients to help them make informed decisions about debt relief. At the San Diego & Riverside County-based bankruptcy law firm of Chang & Diamond, APC, our lawyers work with clients to ensure that they understand each option and every possible outcome. To discuss whether Chapter 7 or Chapter 13 bankruptcy is best for you, contact Chang & Diamond, APC, today and schedule a free initial consultation.

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