In most cases, it makes sense to file under chapter 7. This is the quickest and most cost-effective way to obtain debt relief. It does not involve a repayment plan and most people who file under chapter 7 lose very few if any assets. I have seen cases where a person filed under chapter 13 which is a repayment plan whereas they could have filed under chapter 7.
Unfortunately, there are several attorneys in the Denver area who will put their clients into a chapter 13 when the person should have filed under chapter 7. Bankruptcy attorneys can charge 3 times as much in a chapter 13 than in a chapter 7 bankruptcy. Before you file under chapter 13, get a second opinion of your eligibility to file under chapter 7.
A chapter 7 bankruptcy provides immediate relief and there is no repayment plan. A chapter 13 is more expensive, lasts from 3-5 years and involves paying a portion or all of your debts back. A chapter 13 is appropriate for individuals who because of their income do not qualify under the means test to file a chapter 7. Other debtors may file under chapter 13 to protect assets they would lose under a chapter 13. There are a few other reasons a person may file under chapter 13. To learn more about the differences between the two chapters of bankruptcy click here.