Understanding Your Bankruptcy Options
Many people considering bankruptcy aren’t sure which type they need—or have been told conflicting information. The two most common consumer bankruptcies are Chapter 7 and Chapter 13, and they work very differently. Vaughn & Associates helps individuals across Cleveland and Northeast Ohio understand the difference between Chapter 7 and Chapter 13 bankruptcy, determine which option they qualify for, and choose the path that offers the best long-term relief.
Chapter 7 vs. Chapter 13 at a Glance
| Feature | Chapter 7 Bankruptcy | Chapter 13 Bankruptcy |
|---|---|---|
| Typical Duration | 3–4 months | 3–5 years |
| Primary Purpose | Discharge unsecured debt | Repay debts through a court-approved plan |
| Payment Plan | No repayment plan | Monthly payments to a trustee |
| Eligibility | Must pass the means test | Requires regular income |
| Property | Non-exempt property may be surrendered | Often used to keep property |
| Best For | Credit cards, medical bills, personal loans | Catching up on mortgage or car arrears |
This comparison helps clarify why many eligible filers prefer Chapter 7 when it’s available.
Which Bankruptcy Is Right for You?
When Chapter 7 May Be the Better Choice
Chapter 7 is often ideal for individuals with mostly unsecured debt and limited disposable income. If you qualify, it can eliminate debt quickly without committing to years of payments. Many clients are able to keep their home, car, and personal property using Ohio exemptions.
When Chapter 13 May Be Necessary
Chapter 13 may be appropriate for individuals who earn too much to qualify for Chapter 7 or who need time to catch up on mortgage or car payments. It involves a long-term repayment plan and ongoing court supervision.
Our firm focuses exclusively on Chapter 7 bankruptcy. If your situation truly requires Chapter 13, we will explain why and help you understand your next steps honestly.
Why Chapter 7 Is Often the Preferred Option
For those who qualify, Chapter 7 offers several advantages:
Faster resolution and quicker discharge
No long-term repayment plan
Immediate relief through the automatic stay
Ability to wipe out most unsecured debt
A true fresh start without years of court oversight
Vaughn & Associates concentrates on Chapter 7 cases to ensure clients receive focused, efficient, and knowledgeable representation.
Clearing Up Common Bankruptcy Myths
“I’m behind on my house, so I have to file Chapter 13.”
Not always. Chapter 7 can sometimes free up income by eliminating other debts, making it easier to catch up—or allowing you to make a strategic decision about the property.
“Chapter 13 is safer than Chapter 7.”
Chapter 13 carries risk. If payments can’t be maintained for the full term, cases can be dismissed, leaving debts intact.
“I’ll lose everything in Chapter 7.”
Most Chapter 7 filers keep all or most of their property through Ohio bankruptcy exemptions.
Can creditors still contact me after I file?
No. The automatic stay generally stops creditor harassment immediately. If a creditor continues to contact you, we can take action.
How will bankruptcy affect my credit score?
Bankruptcy does impact credit, but many clients begin rebuilding shortly after discharge. For those already struggling with missed payments, bankruptcy can be a turning point toward recovery.
What should I avoid before filing bankruptcy?
Avoid transferring property, running up credit cards, or repaying friends or family without legal guidance. We’ll advise you on what to do—and what not to do—before filing.
We explain these issues clearly so you can make an informed choice—not one based on fear or misinformation.
Still Unsure Which You Qualify For?
Eligibility for Chapter 7 depends on income, household size, and expenses. If you’re uncertain, we can review your situation and explain the outcome honestly.
Get an Honest Answer About Your Bankruptcy Options
Not sure whether Chapter 7 or Chapter 13 is right for you? We’ll give you a straightforward assessment. While our practice focuses on Chapter 7 relief, we’ll help you understand the best path for your financial future. Contact Vaughn & Associates today for a free bankruptcy evaluation.
