If you are drowning in debt and are considering filing bankruptcy, you’ll first need to decide which type of bankruptcy you’ll seek. For personal bankruptcy, there are two options: Chapter 7 and Chapter 13. But what’s the difference between these? Could you choose either option?

Chapter 7 bankruptcy

Chapter 7 bankruptcy allows you to discharge many types of unsecured debts: credit card debt, medical debt and more. It often will be resolved within months, but a Chapter 7 bankruptcy will affect your credit for 10 years. You also need to pass a means test, showing that your income in the last six months is lower than the Minnesota median income.

Also, if you can continue to make payments on your home and you owe less than $390,000 on it, you can keep it under Minnesota’s bankruptcy exemption law.

Chapter 13 bankruptcy

Chapter 13 bankruptcy allows filers to reorganize their debt. In Chapter 13, debtors will pay their debts over a three- to five-year plan. You can use Chapter 13 to pay past-due child support, income tax and mortgage costs. Chapter 13 also helps debtors avoid having to turn over property, such as a vehicle, while you are repaying your debt.

Once you’ve completed your Chapter 13 payment plan, creditors can’t harass you about paying more on past debts. Finally, a Chapter 13 bankruptcy will remain on your credit report for seven to 10 years.

Seeking bankruptcy is complicated. You always should consult an experienced bankruptcy attorney to help you decide which option might be best for your circumstances. Also, know that the sooner you file bankruptcy, the sooner you can start building your finances toward a better future.