|Chapter 7 Bankruptcy||Chapter 13 Bankruptcy|
|Type of Bankruptcy||Liquidation or a “Fresh Start” that Wipes Clean Most Debts||Repayment Plan, Based on What You Can Afford Per Month, That Pays Creditors a Percentage of the Debt|
|Who Can File?||Individuals and Business Entities||Individuals Only (Including Sole Proprietors)|
|Eligibility Restrictions||Disposable Income Must Be Low Enough to Pass the Chapter 7 Means Test||Cannot Have More Than $383,175 of Unsecured Debt or $1,149,525 of Secured Debt|
|How Long Does It Take to Receive a Discharge?||Typically Three to Five Months||Upon Completion of All Plan Payments (Usually Three to Five Years)|
|Allows Removal of Judgment Liens from Real Property?||Yes, Can Remove Most Judgment Liens, but Chapter 7 Cannot Alter, Slow, or Remove Mortgages||Yes, Chapter 13 Can Remove Second Mortgages That Impair The Debtor’s Exemption. Pay a Low Percentage of The Second Mortgage Balance Back|
|Allows Reducing of Vehicle Loan Balances to the Fair Market Value (FMV) of the Vehicle?||Yes, Redeem The Vehicle Through 11 U.S.C. § 722 By Paying The FMV Of The Vehicle With Cash or A Loan (Offered By Lenders Such As 722 Redemption Funding, Inc.)||Yes, Chapter 13 Can “Cramdown” The Car Loan Balance Down to The FMV of The Vehicle if The Vehicle Was Purchased Over 910 Days Ago|
*This chart is for informational purposes only and does not constitute legal advice nor does acceptance of it create an attorney-client relationship with The Southard Law Firm, LLC. Please contact The Southard Law Firm, LLC, for a detailed explanation on how bankruptcy can work for you.