Chapter 7 liquidates your debts and property if you’re Section thirteen is actually a great reorganization of your own expense. A portion of the distinction is the fact in Part 13 might pay-off a percentage of the loans over around three or five years. A bankruptcy proceeding could be a good idea when the: – The money you owe are primarily unsecured and you may dischargeable (handmade cards, medical expense, personal loans) – You have got almost no low-excused possessions – You need not lose defaults to retain safeguarded assets – You don’t have disposable money which will finance a section 13 plan Chapter 13 is likely wise to: – Provides non-dischargeable expenses (alimony, guy support, taxation, fines and you can punishment, figuratively speaking) – Must preserve non-exempt assets – Must dump home financing or auto loan standard – Features higher websites throwaway money