YOU MUST DECIDE
The difference between filing bankruptcy through a chapter 7 and chapter 13 is that in a chapter 7 bankruptcy you do not have to pay anything to creditors unless a court requires a sale of any non-exempt assets. For example, exemptions on your house, or car. Otherwise any unpaid and remaining debt owed, you would the not be held responsible for. A chapter 13 bankruptcy does not require that you have to sell off non-exempt assets to pay back to your creditors. You instead have to pay your debt back through a court over a period of three to five years. The percentage of unsecured debt you are required to repay must be at least equal to what your creditors would get if your non-exempt assets were sold off as part of a Chapter 7 bankruptcy. If you successfully complete the court-ordered repayment schedule, any unpaid unsecured debt is then let go. To prevent foreclosure on your house, you should try and do it through chapter 13. Even though a chapter 7 delays foreclosure, it does not fully prevent it since you have to pay off your mortgage debt. You would then lose your house and all equity in that house. That is why it is so important to be able to live with in your means and not over extend your credit so you do not wind up in these unfortunate situations. Obviously there are cases where you get over your head and just get caught up in a vicious cycle where it is almost impossible to pay back all that you owe. The good news is that if you do file for bankruptcy you can still in time get your credit and your life back!