Bankruptcy · 27 guides
Chapter 7 vs. Chapter 13, Compared
Chapter 7 and Chapter 13 bankruptcy compared side by side: duration, cost, income rules, property treatment, and credit-reporting differences.
On this page
- The side-by-side comparison
- How does income decide the question?
- Which debts and situations point toward each chapter?
- Common mistakes to avoid
- Frequently asked questions
- What is the main difference between Chapter 7 and Chapter 13?
- How does income decide which chapter is available?
- Can I keep my house in Chapter 7?
- Which chapter helps someone who is behind on a mortgage?
- How long does each chapter stay on a credit report?
- Does either chapter wipe out student loans or child support?
- When to talk to a professional
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. The goal is 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. 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. It 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 are worth knowing. First, special circumstances can rebut the calculation's presumptions. Second, "failing" the means test for Chapter 7 is not a dead end — it is usually the signpost toward Chapter 13.
In plain English
Here's 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.
Frequently asked questions
What is the main difference between Chapter 7 and Chapter 13?
Chapter 7 is faster and cheaper: about four to six months, a $338 court fee, and qualifying debts discharged without a repayment plan. Chapter 13 is a three-to-five-year repayment plan with a $313 court fee that generally keeps property and can catch up a mortgage. Most other differences follow from that core trade.
How does income decide which chapter is available?
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, and enough money left over each month points toward Chapter 13, where that capacity funds the plan. The medians and allowances change on a schedule, so current figures matter.
Can I keep my house in Chapter 7?
Often, yes, but it depends on state exemptions. In Chapter 7 the trustee can sell non-exempt property, although most consumer cases are no-asset cases where nothing is sold. A house that is safe under one state's exemptions can be at risk under another's, which is why the question generally needs an attorney's review of the actual numbers.
Which chapter helps someone who is behind on a mortgage?
Chapter 13 is the classic foreclosure tool. Mortgage or car-loan arrears can be spread across the plan while regular payments resume. Chapter 7 has no mechanism to catch up arrears over time.
How long does each chapter stay on a credit report?
A Chapter 7 case can be reported for up to 10 years from filing. A Chapter 13 case is commonly reported for up to 7 years from filing. That difference is generally not the deciding factor on its own, since Chapter 13 also involves years of plan payments and a real risk of not completing the plan.
Does either chapter wipe out student loans or child support?
Generally, no. Neither chapter discharges most student loans, domestic support obligations, or most recent taxes. Straightforward unsecured debt such as credit cards, medical bills, and personal loans is what both chapters are built to address.
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 go 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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