Chapter 7 vs. Chapter 13: When Each One Actually Makes Sense
Chapter 7 costs $338 to file and typically discharges your debts within 3 to 5 months. Chapter 13 costs $313 to file but locks you into a court-supervised repayment plan lasting 3 to 5 years. Which one fits has almost nothing to do with how much you owe — it comes down to your income, what you own, and what you're trying to save.
Reviewed by Leonard Goldberg, Editor · Last updated
The short answer
Chapter 7 fits if your income is at or below your state's median, you don't have much non-exempt property to protect, and you want the debt gone fast — expect the $338 filing fee plus roughly $1,000 to $2,500 in attorney fees, most of it paid upfront. Chapter 13 fits if you're behind on a mortgage or car loan and want to keep the property, your income is too high to pass the Chapter 7 means test, or you have a co-signer you want to shield from collection — the $313 filing fee is smaller, but attorney fees (commonly $3,000 to $5,000+) are usually built into your monthly plan payment instead of due upfront. Neither chapter erases child support, alimony, most student loans, recent priority tax debt, or debts from injuries caused by driving under the influence. There's no legal minimum amount of debt to file either one — the bankruptcy code sets no debt floor, whatever a "you need at least $X" headline implies. If a stricter budget or a debt management plan would clear your balances within a few years without a court filing, that's usually worth ruling out first.
The Six Moments That Change the Answer
#1
You're behind on your mortgage and want to keep the house
Chapter 13's automatic stay stops a foreclosure the moment you file, and the repayment plan lets you cure the missed payments over 3 to 5 years while staying current on new ones. Chapter 7 can wipe out your personal liability for the mortgage, but it does nothing to stop the lender from foreclosing on the house itself if you're behind.
#2
Your income is above your state's median
If your average income over the past six months exceeds the median for your state and household size, you have to pass a more detailed means test to qualify for Chapter 7. Show enough disposable income after allowed expenses and the case is presumed "abusive" — pushing most filers toward Chapter 13 instead.
#3
You own property a Chapter 7 trustee could sell
A second car, a rental property, or home equity above what your state's exemption laws protect can be sold by a Chapter 7 trustee to pay creditors. Chapter 13 lets you keep that property and instead repay its non-exempt value to creditors over the life of the plan.
#4
Someone co-signed a loan for you
Chapter 13's codebtor stay stops creditors from pursuing a co-signer on a consumer debt while your case is open, unless the court says otherwise. Chapter 7 offers no such protection — a creditor can go after your co-signer for the balance as soon as your case starts.
#5
You owe recent priority tax debt or fell behind on child support
Chapter 13 lets you spread recent, non-dischargeable tax debt across the plan instead of paying it in a lump sum, and it can catch up past-due child support in structured installments while the automatic stay holds other creditors off. Chapter 7 discharges neither.
#6
You have little to protect and just want it over
If your income is below the median, you have no home equity to save, and your assets fit within your state's exemptions, Chapter 7 is usually the faster, cheaper path — individual filers get a discharge in more than 99% of cases, typically 60 to 90 days after the creditors' meeting.
Your Numbers First
See what filing would actually cost, and what creditors can already reach before you decide.
- Bankruptcy Cost Calculator — Filing fees and attorney costs in your state
- Wage Garnishment Limits — What creditors can take before you file
- Workers' Comp Case Value — If injury debt started with a work accident
FAQs
Is there a minimum amount of debt required to file Chapter 7?
No. The bankruptcy code sets no debt floor — any amount of debt can technically qualify you for Chapter 7. What actually determines eligibility is your income relative to your state's median, not how much you owe. Some advisors suggest waiting until debt reaches a level where bankruptcy's costs and credit impact are clearly worth it, but that's a practical judgment call, not a legal requirement.
What does Chapter 7 actually cost, all in?
Budget for the $338 filing fee plus attorney fees that commonly run $1,000 to $2,500, most of it due before your case is filed. Add two mandatory short courses — credit counseling before filing and debtor education before discharge — for a modest additional fee each. Filers below 150% of the federal poverty line can ask the court to waive the filing fee entirely.
What does Chapter 13 actually cost, all in?
The filing fee is $313, but attorney fees are the bigger number — commonly $3,000 to $5,000 or more, since a Chapter 13 case involves ongoing court supervision of a multi-year plan. Most of that fee isn't paid upfront; it's built into your monthly plan payment and disbursed to your attorney by the trustee alongside your creditors.
How long does each one stay on my credit report?
Chapter 7 can appear on your credit report for up to 10 years from the filing date. Chapter 13 typically drops off after 7 years, since it involves repaying creditors rather than a straight liquidation. In both cases, the damage to your score is heaviest right after filing and fades well before the reporting period ends, especially if you rebuild credit responsibly.
What debts survive bankruptcy no matter which chapter I file?
Child support and alimony, most federal student loans (absent a rare undue-hardship discharge), certain recent tax debts, criminal restitution, and debts for death or injury caused by driving under the influence all survive both Chapter 7 and Chapter 13. Chapter 13 discharges a slightly wider range of debts than Chapter 7 — including some willful-property-damage claims and divorce property-settlement debts — but the core exceptions above apply either way.
Can I keep my house or car?
In Chapter 7, that depends on your state's exemption laws and how much equity you have — many filers keep everything because there's nothing left for a trustee to sell. In Chapter 13, keeping property is closer to the point: the plan is built around curing mortgage or car-loan arrears while you stay in the home and keep driving the car, as long as you keep making the plan payments.
Do I need a lawyer to file?
You can file either chapter without one, but Chapter 13's multi-year plan, confirmation hearing, and ongoing trustee payments make it hard to manage alone — most filers use an attorney. Chapter 7 is simpler and some filers handle it pro se, but a means-test miscalculation or an overlooked asset can turn a routine case into a costly mistake, so a consultation is still worth it even for straightforward cases.
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