Does Chapter 13 bankruptcy look better on my credit record than a Chapter 7 bankruptcy?

Some people may believe that a Chapter 13 bankruptcy will look better on their credit record. Many believe this to be the case because in a Chapter 13, the debtor is paying back some of their debt while in a Chapter 7 Bankruptcy the debtor is just wiping out their debt. However, a Chapter 13 bankruptcy actually may not look better on your credit record.

The reason a Chapter 13 won’t look better on your credit record is because a Chapter 7 bankruptcy is discharged much earlier than a Chapter 13 bankruptcy. A Chapter 7 bankruptcy may last for about four months while a Chapter 13 bankruptcy will exist for 3 to 5 years while one repays their debt. Therefore, a person filing for Chapter 7 bankruptcy will be able to re-establish their credit faster then someone filing for a Chapter 13 bankruptcy. A creditor will look at whether your bankruptcy is finished and with Chapter 13 bankruptcy, the discharge takes a lot longer than a Chapter 7.