Bankruptcy · 13 guides
Chapter 7 vs. Chapter 13: The Honest Comparison
Chapter 7 and Chapter 13 bankruptcy compared side by side — duration, cost, income rules, property treatment, foreclosure help, and credit reporting differences.
On this page
If you've concluded bankruptcy might be on the table, the next question is almost always "which kind?" This page lays out the real differences — duration, cost, property treatment, income rules, credit impact — so you can have an informed conversation with a professional. One thing it will not do is tell you which chapter to file: that answer depends on your income, property, state exemptions, and goals, and it is precisely the judgment a licensed attorney exists to make with you.
Short answer
Chapter 7 is faster and cheaper: about four to six months, $338, with qualifying debts discharged without a repayment plan — but it has income limits and non-exempt property can be sold. Chapter 13 is a three-to-five-year repayment plan, $313 to file, generally keeps property, can catch up a mortgage — and demands years of plan payments. Most other differences follow from that core trade.
The side-by-side comparison
| Chapter 7 | Chapter 13 | |
|---|---|---|
| Nickname | Liquidation | Reorganization (wage earner's plan) |
| Typical duration | About 4–6 months to discharge | 3–5 years of plan payments, then discharge |
| Court filing fee | $338 (installments possible; waiver available for qualifying low incomes) | $313 (installments possible; no waiver) |
| Income requirements | Means test: at/below state median, or limited disposable income | Requires regular income to fund a plan; statutory debt limits apply |
| What happens to property | Non-exempt property can be sold by the trustee; most consumer cases are no-asset and nothing is sold | Property is generally kept while the plan pays creditors at least what non-exempt property would have yielded |
| Behind on a mortgage or car | No mechanism to catch up arrears over time | Arrears can be spread across the plan while regular payments resume — the classic foreclosure tool |
| Repayment of unsecured debt | Generally none outside asset liquidation | Partial repayment via the plan, based on disposable income and the case math |
| Credit reporting | Up to 10 years from filing | Commonly up to 7 years from filing |
| Discharge timing | Months after filing | Only after completing all plan payments |
| Historical completion | The large majority of consumer cases reach discharge | A substantial share of plans do not reach discharge — realistic budgeting matters |
How does income decide the question?
Short answer
The means test sorts filers. Household income at or below the state median generally allows Chapter 7. Above the median, a standardized disposable-income calculation applies: enough left over each month points toward Chapter 13, where that capacity funds the plan. The medians and allowances change on a schedule — always check current figures.
The mechanics live in the means test guide, with current numbers at the U.S. Trustee Program. Two nuances worth knowing: special circumstances can rebut the calculation's presumptions, and "failing" the means test for Chapter 7 is not a dead end — it is usually the signpost toward Chapter 13.
In plain English
A rough intuition (not a rule): Chapter 7 tends to fit "no income to spare, mostly unsecured debt, property within exemptions." Chapter 13 tends to fit "steady paycheck, something to protect, or income above the line." Real cases mix these — which is why the intuition is where analysis starts, not where it ends.
Which debts and situations point toward each chapter?
Short answer
Foreclosure arrears, car-loan catch-up, non-exempt property worth keeping, and certain tax structures are classic Chapter 13 territory. Straightforward unsecured debt — cards, medical bills, personal loans — with property inside exemptions is classic Chapter 7 territory. Neither chapter discharges most student loans, domestic support, or most recent taxes.
The decision can't be reduced to a table
State exemption schemes differ enormously; a house safe in one state's Chapter 7 is at risk in another's. Prior bankruptcies limit refiling and discharge timing. Co-signers, pending lawsuits, recent transfers, and business debts all change the analysis. Use this page to understand the landscape — then put your actual facts in front of a consumer bankruptcy attorney; consultations are commonly free.
Common mistakes to avoid
- Choosing a chapter from a comparison table — including this one — instead of a consultation with your actual numbers.
- Assuming Chapter 7 means losing your home or car; exemptions and reaffirmation/redemption options often say otherwise.
- Assuming Chapter 13 is 'the responsible one' without stress-testing whether the plan payment survives a bad month.
- Ignoring timing rules — recent filings, recent charges, and recent transfers can reshape eligibility and discharge.
- Forgetting the required pre-filing credit counseling course in either chapter.
- Treating the 7-vs-10-year reporting difference as the deciding factor while ignoring plan-years and completion risk.
When to talk to a professional
Strongly consider talking to a professional
The chapter decision is the single highest-stakes choice in consumer bankruptcy, and it is individualized by definition. Take your document stack (start with the bankruptcy document checklist) to a consumer bankruptcy attorney — NACBA maintains a directory and free consultations are common — or to legal aid if cost is the barrier. An hour with your real numbers beats a hundred comparison articles.
Terms used on this page
Sources
This page is based on the following official and authoritative sources. Always check the source itself for the most current rules.
Educational information — not advice
This topic involves court deadlines and rights you can permanently lose.
This page provides general educational information about credit, debt, and consumer protections. It is not legal advice, financial advice, or credit repair services, and reading it does not create any professional relationship. Laws, procedures, deadlines, and dollar amounts vary by state and change over time.
Before acting or deciding not to act, strongly consider consulting a licensed attorney in your state. If cost is a concern, legal aid organizations may help for free. See our full disclaimer.
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Related guides
- Bankruptcy hub
- Chapter 7 Bankruptcy, ExplainedHow Chapter 7 bankruptcy generally works — eligibility and the means test, the process from credit counseling to discharge, exemptions, costs, and credit impact.
- Chapter 13 Bankruptcy, ExplainedHow Chapter 13 bankruptcy generally works — the 3–5 year repayment plan, who typically uses it, foreclosure protection, costs, completion realities, and credit impact.
- The Bankruptcy Means Test, ExplainedHow the bankruptcy means test generally works — the state-median comparison, the disposable income calculation, special circumstances, and where the current numbers live.
- The Automatic Stay: How Filing Bankruptcy Pauses CollectionsWhat the automatic stay stops the moment a bankruptcy is filed — garnishments, lawsuits, foreclosure sales — what it doesn't stop, and how it can be limited.
- Rebuilding Credit After Bankruptcy: A Realistic RoadmapWhat actually rebuilds credit after bankruptcy — verifying your reports post-discharge, adding positive history safely, honest timelines, and offers to avoid.