Chapter 7 liquidates your financial situation and you can possessions whenever you are Chapter 13 was good reorganization of your own expenses. A portion of the differences is that when you look at the Part 13 you are going to pay off a portion of your loans over three otherwise 5 years. A bankruptcy proceeding could be recommended if: – The money you owe are mainly unsecured and you can dischargeable (playing cards, scientific bills, signature loans) – You may have little or no non-exempt assets – You don’t need to beat defaults to retain protected possessions – You don’t need to throw away income which will loans a chapter 13 plan Part 13 is likely smart to: – Has low-dischargeable expenses (alimony, child support, fees, penalties and fees and you can penalties, college loans) – Have to keep low-exempt assets – Need to dump a mortgage otherwise auto loan standard – Features high online throwaway money