A consumer filing Chapter 13 must review the impact of bankruptcy to his/her credit report.  That it stays on it 10 years after the debts have been discharged and that it may also cause higher interest rates on future loans. Not only that, Chapter 13 Bankruptcy relies on the consumer’s income, which the repayment plan will own for three to five years, so the consumer has to make sure that it is the only option left for him/her and that he/she has really exhausted all avenues to debt relief.

A Chapter 13 bankruptcy is about repayment of part of the debt without any loss of assets, while a Chapter 7 is the liquidation of the consumer’s assets without payments. Why do consumers file Chapter 13 instead of Chapter 7?