Ch 7 v Ch 13 on your credit report

[boomerkae]

Do they appear any different?

Our lawyer seems to think that a 13 "looks" better and that your credit can recover faster.

Thoughts?

[IBroke]

That's though to say. It's true that a CH13 is going to fall off the report 3 years earlier than a CH7 (7 instead of 10), but on the other hand, a CH7 won't do much damage to your credit after 7 years. If you don't miss any payments after your discharge, you can basically get any credit you want 7 years after discharge.

Keep in mind that you have to ask for permission for ANY credit while on a CH13 (either for 3 or 5 years) - so that's def. not a CH13 advantage.

[df04527]

It doesn't matter from a score perspective but on a review the lender COULD (but doubtful) swallow a 13 easier than a 7 and extend credit.

[HHM]

A BK is a BK. As far as I can tell, 7 and 13's are not "scored" differently. (but maybe they are).

One misconception, BK's, regardless of chapter, can be on your credit report for 10 years. HOWEVER, it is common practice that a chapter 13 falls off after only 7 years. (FCRA makes no distinction between 7 or 13 as far a length of reporting).

What your lawyer is really saying is that under a "subjective" review of your credit report (think mortgages), if a human is actually reviewing the record, a 13 may be viewed more favorably because you paid something back. For example, FHA has a mortgage refi program once you have been in your chapter 13 for only 1 year.

However, the irony is, it is actually harder to get credit in an active 13 than after 7. One main reason, you are IN BK for 3-5 years in chapter 13 and are not supposed to take on credit without trustee permission.