The difference between Chapter 13 bankruptcy and Chapter 7 bankruptcy


Dear Experian,

What is the main difference between a Chapter 13 bankruptcy and a Chapter 7 bankruptcy? Also, how do the two types affect your credit rating differently?



Dear SRD,

Under Chapter 13 bankruptcy you must repay at least a portion of the debt. Under Chapter 7 bankruptcy, you don’t repay any of the debt.

Because you repay at least some of the debt, Chapter 13 bankruptcy remains on your credit file for only seven years from the filing date. Chapter 7 bankruptcy remains for 10 years because you don’t repay any of the debt.

Bankruptcy has the most serious negative impact on credit scores. Chapter 13 bankruptcy might be slightly better because you do repay some of the debt, but both can affect your ability to qualify for credit as long as they remain part of your credit report.

Thanks for asking.

The “Ask Experian” team

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