What is the Difference Between Chapter 7 and Chapter 13?

The two most common forms of personal bankruptcy work differently, protect different things, and suit different financial situations. Here's a clear comparison.

The Core Difference

Chapter 7 is a liquidation bankruptcy. It's the fastest path to debt relief — most cases complete in 3–6 months. The court appoints a trustee who may sell non-exempt assets to pay creditors, then discharges (eliminates) your remaining eligible debt.

Chapter 13 is a reorganization bankruptcy. You keep all your property and propose a repayment plan spanning 3 to 5 years. After completing the plan, the court discharges your remaining unsecured debt.

Side-by-Side Comparison

| | Chapter 7 | Chapter 13 | |---|---|---| | Timeline | 3–6 months | 3–5 years | | Income requirement | Must pass means test | Must have regular income to fund plan | | Property | Non-exempt assets may be sold | All property kept if plan payments made | | Mortgage arrears | Cannot cure arrears | Can cure over plan period | | Co-debtor protection | No automatic protection for co-signers | Co-signers protected during case | | Court filing fee | $338 | $313 | | Stays on credit report | 10 years | 7 years |

When Chapter 7 Is Usually Better

• Your income is at or below your state's median
• Your debts are mostly unsecured (credit cards, medical bills)
• You don't have significant non-exempt assets at risk
• You need fast relief — the automatic stay plus a discharge in under 6 months
• You're not behind on a mortgage you want to save

When Chapter 13 Is Usually Better

• You're behind on mortgage payments and want to save your home from foreclosure
• You earn too much to pass the means test for Chapter 7
• You own valuable property (a car with equity, non-exempt savings) you want to keep
• You have non-dischargeable debts (like recent taxes) you want to pay over time in an organized way
• You filed Chapter 7 within the past 8 years and can't file again yet

What About Debt Amount?

There's no minimum debt amount required to file either chapter. However, Chapter 13 has debt limits — in 2024, unsecured debt must be below approximately $465,275 and secured debt below approximately $1,395,875 (these figures adjust periodically). If you exceed the Chapter 13 limits, other options like Chapter 11 may apply.

Can You Switch Chapters?

Yes. Cases can be converted between chapters in many situations. For example, if you filed Chapter 13 but lose your job and can no longer make plan payments, you may be able to convert to Chapter 7 (if you now qualify). Conversion has its own rules and timelines.

Start with the Screener

Not sure which chapter fits? Easy-Case's free screener uses your income, household size, assets, and goals to recommend the most suitable option. There's no account required and no obligation.

Learn what debts are discharged in bankruptcy or see how long bankruptcy takes.