Chapter 7 or Chapter 13: Which Bankruptcy Type Is Best for Me?

Chapter 7 Vs. Chapter 13 Bankruptcy: Pros & Cons

If you are considering filing bankruptcy, one of the first decisions you’ll need to make is which chapter bankruptcy is the best for you. The answer will depend on your goals and your income. If you are looking for a quick way to get rid of all of your debt and not have any payments, Chapter 7 may be the best choice. However, if you have property or vehicles that hold equity and that you want to keep, Chapter 13 is probably the better option. Each type of bankruptcy has its own benefits and drawbacks

You’ll need to consider your financial situation before you choose which chapter bankruptcy to file. If you have a lot of equity in your home, you may lose it all if you file Chapter 7. If you own a home or other assets that you want to keep, you should consider filing Chapter 13.

Some people struggle to make timely payments on their bills. If this is you, filing Reno Chapter 7 bankruptcy may be preferable for you because there are no payment plans to follow. This type of bankruptcy takes less time, which makes it appealing to many debtors who are seeking quick relief from bills and debt collectors.

Nevada state laws limit who can file under each bankruptcy chapter. Consulting with an experienced Reno bankruptcy law office is the best way to determine which form of debt relief is the best for you.

Man struggling with debt in Reno, NV

Chapter 7 Bankruptcy In Nevada

Chapter 7 bankruptcy is a good choice for many people, but isn’t best for everyone. You’ll need to meet some basic qualifications and be able to prove that you really need this type of debt relief. Nevada state laws regarding bankruptcy are designed so that people who don’t really need to file bankruptcy can’t abuse the system in order to get out of paying debts that they can actually afford to pay. In order to file Reno Chapter 7 bankruptcy, you’ll either need to earn less than the state median income or pass a bankruptcy means test. Your Reno bankruptcy attorney can help you understand whether you meet the qualifications and whether Chapter 7 bankruptcy is right for you.

If you file Chapter 7 bankruptcy, an automatic stay will immediately be put into effect. This requires debt collectors to stop contacting you and halts most legal action that may be taking place against you, such as debt collection efforts and most types of eviction. Your bankruptcy trustee will sell your assets, such as your vehicles or your home, in order to settle and discharge all of your debts. This type of debt liquidation is a good choice for someone who needs fast, effective debt relief and total debt erasure. Some of the disadvantages of filing Chapter 7 bankruptcy are that you may lose all or most of your assets, including your home, an inheritance, and your savings, and the bankruptcy will remain on your credit for 10 years.

Chapter 13 Bankruptcy In Nevada

Reno Chapter 13 bankruptcy is a bit different from Chapter 7. It’s essentially a government-sponsored debt consolidation plan with its own requirements and qualifications. Chapter 13 bankruptcy reorganizes your debt and consolidates it all into a payment plan that you agree upon with the bankruptcy trustee.

The trustee will look over your income and determine what payments you can afford. Once this has been determined and you have agreed to make the payments, you will make monthly payments for 3-5 years. At the end of that time, the remaining unpaid debt will be dismissed. In the vast majority of cases, people who file Reno Chapter 13 bankruptcy end up paying only a small percentage of their actual debt amount.

For many people, Chapter 13 is a preferable type of bankruptcy because you are able to retain all of your assets, including your home, vehicles, equity, and bank accounts. Some people may choose to sell some or all of their assets in order to make the payments, but many people do not need or want to do that, and instead make their payments work within their regular budget. Chapter 13 bankruptcy remains on your credit for just 7 years. You may qualify to purchase a home or take out another loan during that time if you meet certain criteria.

One disadvantage of Chapter 13 bankruptcy are that you will need to continue to work with debt collectors, make payments, and pay late fees while you go through the bankruptcy process. For some people, this can be stressful or financially impossible.

If you are wondering which chapter bankruptcy in Nevada may be right for you, consult with an experienced Reno bankruptcy attorney.

Work With Reno’s Most Trusted Bankruptcy Lawyers

Zero Down Bankruptcy Lawyers of Reno is one of Nevada’s top rated bankruptcy law firms, providing effective and experienced legal advice for people facing bankruptcy. We treat our clients with respect and honesty, helping you to understand all of your options so you can make the best decisions. Plus, no prepayment is required, making us an affordable choice. Call our office today to schedule your free consultation!


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Zero Down Bankruptcy Lawyers Of Reno
Phone: (702) 842-0700

Las Vegas:
5552 Ashley Creek St 
Las Vegas, NV 89135

North Las Vegas:
7251 W Lake Mead Blvd
Las Vegas, NV 89128

1489 W Warm Springs Rd #110
Henderson, NV 89014