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Chapter 7 vs Chapter 13 Bankruptcy
Two very different paths — one wipes debt fast, one lets you keep your home. See which fits your situation.
⚖️ This is educational only — consult a bankruptcy attorney before making any decisions.
Chapter 7 vs Chapter 13 Bankruptcy
Enter your situation to see which chapter might apply to you.
Facing foreclosure? A Certified Distressed Property Expert (CDPE) can help you understand your options.
Find a CDPE Specialist Near You →Chapter 7: The “Fresh Start”
Chapter 7 liquidates your non-exempt assets and discharges most unsecured debt (credit cards, medical bills, personal loans) in 3-6 months. You must pass the “means test” — your income must be below your state's median income, or you must show that after allowed expenses, you can't afford a Chapter 13 repayment plan. The filing cost is approximately $338 in court fees plus attorney fees of $1,000-3,500.
What Chapter 7 does not discharge: student loans (except in rare hardship cases), child support, alimony, recent tax debts (under 3 years), and secured debts where you want to keep the collateral (car loan, mortgage). If you want to keep your car or home, you must continue making payments — the discharge only applies to your personal liability, not the lien.
Chapter 13: The “Repayment Plan”
Chapter 13 creates a court-supervised 3-5 year repayment plan. You keep all your assets but must use your disposable income to pay back a portion of your debts. At the end of the plan, remaining unsecured balances are discharged. There is no means test — you must simply have regular income and unsecured debts below $465,275 and secured debts below $1,395,875 (2026 limits).
Chapter 13 is the better choice if: you have significant home equity you want to protect, you're behind on your mortgage and need time to catch up, you have non-exempt assets a Chapter 7 trustee would sell, or your income is too high to pass the Chapter 7 means test. The filing cost is approximately $313 in court fees plus $2,500-6,000 in attorney fees (often paid through the plan).
Credit Impact Comparison
Chapter 7 stays on your credit report for 10 years from the filing date. Your score typically drops 100-200 points at filing but begins recovering within 12-18 months as discharged debts stop dragging your score down. Most people reach a 620-670 score within 2 years of discharge.
Chapter 13 stays on your report for 7 years from the filing date (3 fewer years). Your score may be slightly higher during the repayment period because on-time plan payments demonstrate responsibility. However, you can't open new credit during the plan without court permission, which limits your rebuilding options until discharge.