Chapter 13 Bankruptcy

• A Chapter 13 Bankruptcy reorganizes your debt and reduces the amount you repay on most debts. The bankruptcy court determines how much you can afford to pay toward your debts each month and requires you to pay a portion of your monthly income to the bankruptcy trustee. A Chapter 13 Bankruptcy will not typically cancel a judgment, but it may reduce the amount you owe under the judgment. However, this filing will not reduce judgment debt for unpaid child support or damages caused while driving under the influence of drugs or alcohol.
  
  

Chapter 7 Bankruptcy

• A Chapter 7 Bankruptcy filing differs from a Chapter 13 filing in that it discharges most of your debts, instead of reorganizing them under a repayment plan. This means that you do not have to repay the debts after the bankruptcy court grants a discharge. Most judgments, except those for child support and damages related to driving under the influence, are canceled under a Chapter 7 Bankruptcy.
  
  

Public Records

• Although filing bankruptcy may eliminate or reduce debt liabilities under most judgments, it will not remove judgments from public record. This means that anyone who accesses your public record files, including potential lenders, employers and landlords, will see both your bankruptcy filing and any judgments entered against you. However, your public records will show applicable judgments as discharged in bankruptcy.
  
  

Credit Damage

• A bankruptcy filing will lower your credit score and can affect your ability to qualify for car loans, credit cards, lines of credit and mortgage loans. The effect on your credit score depends on the negative entries already in your credit file at the time of the bankruptcy filing. If you already have judgments against you, the bankruptcy filing may not cause significant additional credit damage; however, unlike judgments, bankruptcies stay on your credit report for 10 years instead of seven.