Why Cpt. 7 over Chtp. 13?

[chpxiii]

Ok. I'm already in chpt. 13. I filed June '03, so it is under old law. When I met with my attorney, everyone there said it was better to file chpt. 13. I had a car I wanted to keep, and them, along with friends, said that creditors look on a chpt. 13 better than a chpt. 7 because atleast you paid some money back to creditors and it also gives you a chance to show some payment history, even if it was while in bankruptcy.

I realize that each case is different, but why do I see quite a few posts on this forum saying that you do NOT want to file 13, and that 7 is better? I don't understand. My understanding is that a 13 (if you can manage that, sure) is better because it "looks" better to creditors - it shows you have paid (some) money back.

Again, I realize this is an individual situation dependent on circumstances, but if a debtor can manage a 13, get it paid off and keep some assets and show a payment history, why urge them in to a 7?

I'm just curious as to the reasoning of some of the posters here on the forums. Thanks!

[SinkingFast]

I moved your thread here, Chp, because the General Talk Section is for non BK Related discussions. Home, family, movies, whatever.

[nosrus77]

I'm not really sure to be honest. Maybe a 13 is better on your credit score, and MAY only show up for 7 years (something I've heard, as opposed to 1- for a 7, but makes no sense to me), but when I was a loan officer it did not matter to our bank. Any BK immediately raised our risk rating to a 99 - the worst there is, regardless of credit score. Small town bank, mind you.

an 11 was the best - very rare, usually secured by cash-equivalent
22 was next - over 725 credit score, good debt-to-income, etc.
33 next - usually credit score a tad lower, or time on job short, etc.
then 44 - usually about as low as we'd dare to go without another officer's initials added to ours.

would not loan under 600 credit score without a REALLY good reason.

As far as 13 versus 7, usually asset protection is the biggest reason, but I honestly don't think it makes a lick of difference to your local lender.

[HHM]

Remember, the decision to file BK should have NOTHING to do with your credit score. A person files BK because they have too much debt relative to their ability to manage that debt (for whatever reason, loss of job, medical, or simply poor decisions). The last thing you should consider when deciding to file BK is your credit score, whether you have a good credit score or bad credit score is not going to change the fact that you cannot pay your bills.

[keepmine]

You file a 13 because, you have assets you wish to keep and the equity is above the level your state exempts or, your disposable income is too high for a Chapter 7.
HHM is correct. How it looks on your credit report ought to be the last thing you consider. The more debt you discharge, the easier it is to start fresh. Always file a 7 if possible.