Comparison of Chapter 7 and Chapter 13

Assumptions:  Total Unsecured Debt of $50,000

Individual Chapter 13 Case will pay 100% of Unsecured Debt

Chapter 13 Plan will last 36 Months

No Equity in House or Cars which cannot be exempted

House Payment and Car Payments to be paid by Debtor Monthly (no arrearage owed)

(attorney fees shown below are the average fees charged but could be higher in complex cases)

Considerations

Chapter 13

Chapter 7

Bankruptcy Court Filing Fee

$274.00

$299.00

Cost for required Credit Counseling

$42.00

$42.00

Cost for required Debtor Education

$20.00

$20.00

Cost of required Credit Report ($70 for Married Couple $50 for an individual)

$50.00

$50.00

Discharge received

36 months

120 days

Years Bankruptcy will be reported on Credit Report

7 years

7  to 10 years

Monthly Payment to Trustee (payment to be made for 36 months)

$1,553.00

$0.00

Attorney Fee ($48.00 of the Chapter 7 fee is allocated to office expenses)

$2500.00

$1189.00

Total Costs

$58,794.00

$1,600.00

Other interesting facts:  During the course of a Chapter 13 case, a Debtor cannot incur new debt without Court approval.   A Chapter 13 Debtor must commit all of his disposable income to the repayment of his debt during the course of the Chapter 13 case.   In a Chapter 7 case, the Court does not supervise a Debtor’s post filing activities.  In addition, all monies earned by a Debtor after the case is filed belong to Debtor free of the dischargeable claims of creditors.  Generally speaking, most mortgage lenders will consider a Debtor for a mortgage 24 months after the entry of your Chapter 7 discharge.