Before you file
Chapter 7 or Chapter 13: how do you know which one fits?
Chapter 7 is a liquidation: a trustee may sell property that is not protected, and most remaining debts are wiped out. Chapter 13 is a repayment plan that lets a person with regular income keep property and pay debts over time, usually three to five years. Which one fits usually comes down to whether your income passes the means test, whether you own property that exemptions do not cover, and whether you are behind on a home or car you want to keep.1 2 3
Connect to a bankruptcy lawyerThe choice is often made by a few facts about your income, your property and what you are behind on. This guide walks through each one in the order they usually matter.
General information, not legal advice. Rules and amounts change; check with a lawyer or the court before you act.
In this guide
What does each chapter actually do?
The chapters are different tools, so the question is less which one you prefer and more which one your situation calls for.
| Point | Chapter 7 | Chapter 13 |
|---|---|---|
| What it is1 2 | Liquidation: a trustee may sell nonexempt property and pay creditors from the proceeds | A repayment plan for an individual with regular income, who keeps property and pays over time |
| How long it takes1 2 4 | The discharge order is generally issued about 60 to 90 days after the date first set for the meeting of creditors | The plan usually lasts three to five years, and the discharge comes after the payments are completed |
| Debt limits1 2 5 | Available regardless of the amount of debt, subject to the means test for individuals | Unsecured debts under $526,700 and secured debts under $1,580,125, for cases filed on or after April 1, 2025 |
| Court fees6 7 2 | $338 in total (effective December 1, 2023) | $313 in total (effective December 1, 2023) |
Does your income allow Chapter 7?
For individuals whose debts are mainly consumer debts, a means test decides whether a Chapter 7 filing is presumed to be an abuse of the system. If it is, the case may be dismissed or converted, usually to Chapter 13.3 8
The test starts with a comparison. If your current monthly income, multiplied by 12, is at or below the median family income for a household of your size in your state, no one may ask the court to dismiss your case based on the means test presumption.8
If your income is above the median, the full calculation applies. A presumption of abuse can be answered only by showing special circumstances, such as a serious medical condition, that justify extra expenses or an adjustment to income. So a result over the line is the start of a harder question, and it is a good point to get advice.1 8
Do you own property that is not protected?
Bankruptcy law lets individuals protect certain property, called exempt property. In Chapter 7 the trustee can sell only what is not exempt, and only when it is free of liens or worth more than the liens on it plus your exemption.9 5 1
If everything you own is exempt or subject to valid liens, the trustee normally reports that there are no assets to distribute. Most Chapter 7 cases filed by individuals end that way.1
If you have value that exemptions do not cover, Chapter 7 puts it at risk. Chapter 13 lets you keep the property, but your unsecured creditors must receive at least as much through the plan as they would have received if your assets had been liquidated in Chapter 7.1 2 10
Which exemptions you can use is often a question of state law, so this step usually needs a lawyer or careful reading of your state's rules.1
Are you behind on a home or car you want to keep?
This is where Chapter 13 does something Chapter 7 does not. Filing under Chapter 13 can stop a foreclosure, and the plan can catch up missed mortgage payments over time while the regular payments continue.2 11
The catch is that you must keep making every mortgage payment that comes due during the plan on time. A home can still be lost if those payments are missed, or if the foreclosure sale was already completed under state law before the case was filed.2
Chapter 7 wipes out your personal liability on a debt, but a valid lien stays on the property. A lender that is still owed missed payments may be able to take the house or car back after the case.4 1
Chapter 13 can also reschedule secured debts other than the mortgage on your main home, such as a car loan, and spread them over the life of the plan.2
What else can tip the choice?
A few other facts push people one way or the other.
- Someone co-signed a consumer debt with you. Chapter 13 has a special stay that generally stops creditors from collecting that debt from the co-signer.2
- You owe debts with priority status, such as most taxes. A Chapter 13 plan must pay priority claims in full unless the creditor agrees otherwise, so they are paid through the plan.2
- You received a discharge before. A new Chapter 7 discharge is not available if you received one in a Chapter 7 case filed within 8 years before the new petition, and a Chapter 13 discharge is not available if you received a discharge in a Chapter 7 case filed during the 4 years before the new case.12 4 13
Can you change chapters after you file?
Yes, within limits. A debtor may convert a Chapter 7 case to Chapter 13 if eligible for Chapter 13 and if the case was not already converted to Chapter 7 from another chapter. A Chapter 13 debtor may convert the case to Chapter 7 at any time.1 14
Because the choice depends on your own figures, the federal courts list advice on which chapter to file under among the things a lawyer can help with. A petition preparer is not allowed to give that advice.15 16
Common questions
Which chapter costs less to file?
The court fees are close: $338 in total for Chapter 7 and $313 in total for Chapter 13 (effective December 1, 2023). The chapters do different things, so the court fee is rarely what decides it.6 7 2
Can I pick Chapter 13 even if I qualify for Chapter 7?
Chapter 13 is open to individuals with regular income whose debts are under the limits: unsecured debts under $526,700 and secured debts under $1,580,125 for cases filed on or after April 1, 2025. People who qualify for Chapter 7 sometimes use Chapter 13 to save a home from foreclosure.2 5
Sources
Official courts & government references- Chapter 7 - Bankruptcy Basics (uscourts.gov)
- Chapter 13 - Bankruptcy Basics (uscourts.gov)
- Glossary of Legal Terms (uscourts.gov)
- Discharge in Bankruptcy - Bankruptcy Basics (uscourts.gov)
- Federal Register, 90 FR 8941 (Feb. 4, 2025), Judicial Conference: Adjustment of Certain Dollar Amounts Applicable to Bankruptcy Cases
- 28 U.S. Code § 1930 (Cornell LII)
- Bankruptcy Court Miscellaneous Fee Schedule (uscourts.gov)
- 11 U.S. Code § 707(b)(1) (Cornell LII)
- 11 U.S. Code § 522(b) (Cornell LII)
- 11 U.S. Code § 1325(a)(4) (Cornell LII)
- 11 U.S. Code § 1322(b)(5) (Cornell LII)
- 11 U.S. Code § 727(a)(8) (Cornell LII)
- 11 U.S. Code § 1328(f)(1) (Cornell LII)
- 11 U.S. Code § 1307(c) (Cornell LII)
- Filing Without an Attorney (uscourts.gov)
- 11 U.S. Code § 110(a)(1) (Cornell LII)