The Quick Answer
Choose Chapter 7 if your household income is at or below your state's median and your assets fit within the available exemptions. Choose Chapter 13 if you fail the means test, if you have valuable nonexempt property you want to keep, if you are behind on a mortgage or car loan and need to catch up, or if you owe priority debt (recent taxes, child support arrears) that Chapter 7 won't discharge.
About 70 percent of consumer cases filed in 2024 were Chapter 7s, according to U.S. Courts statistics. The remaining 30 percent were Chapter 13s. Both chapters work; they just serve different problems.
Side by Side
| Chapter 7 | Chapter 13 | |
|---|---|---|
| What it is | Liquidation: nonexempt assets sold to pay creditors, remaining qualifying debt discharged | Reorganization: 3 to 5 year repayment plan funded by future income |
| Length | 3 to 6 months | 3 years (below-median income) or 5 years (above-median) |
| Income limit | Must pass the means test under 11 U.S.C. § 707(b) | None, but regular income required |
| Debt limit | None | Unsecured debt under $526,700 and secured debt under $1,580,125 (2025-2028 figures, indexed every 3 years) |
| Filing fee | $338 | $313 |
| Typical attorney fee | $1,200 to $2,500 (paid before filing) | $4,000 to $5,500 (often paid through the plan) |
| Property at risk | Anything above the exemption | Nothing if plan pays creditors at least what they'd receive in Chapter 7 |
| Mortgage arrears | Cannot cure | Can cure over 3 to 5 years |
| Car loan cramdown | Not available | Available for loans more than 910 days old |
| Credit report duration | 10 years from filing | 7 years from filing |
| Waiting period before next Chapter 7 | 8 years | 6 years (or shorter if 70%+ paid) |
When Chapter 7 Is the Right Tool
Chapter 7 is the right call for most consumer debtors with below-median income, manageable assets, and unsecured debt they cannot pay. It works best when:
- You pass the means test (below-median income, or above-median with enough allowed deductions).
- Your home equity is within your state's homestead exemption or you don't own a home.
- Your vehicle equity is within the motor vehicle exemption.
- Your debt is mostly general unsecured (credit cards, medical bills, personal loans, deficiency balances), all of which Chapter 7 discharges.
- You are not behind on a mortgage you want to keep.
- You have not received a Chapter 7 discharge in the last 8 years.
The case is fast and cheap. The trade-off is the limited toolkit: Chapter 7 cannot cure mortgage arrears, cannot strip second liens off underwater homes (the Bank of America v. Caulkett rule), and cannot reduce car loans to current market value.
When Chapter 13 Is the Right Tool
Chapter 13 is the right call when you need one or more of the tools that only it offers:
- Catching up on a mortgage: The plan can cure arrears over the full plan term while you stay current on the regular payment. This stops foreclosure cold.
- Catching up on a car loan or other secured debt: The plan can pay the arrears and the regular payment together, often at a reduced interest rate inside the plan.
- Cramming down a car loan: For vehicles purchased more than 910 days before filing, you can reduce the loan balance to the car's current value (with the difference discharged as unsecured).
- Stripping junior mortgage liens: A wholly underwater second or third mortgage can be stripped off and treated as unsecured (the home value test).
- Protecting nonexempt property: Substantial home equity, valuable collectibles, business interests, recent inheritances, none of which fit Chapter 7 exemptions, can be protected by paying creditors the equivalent of the liquidation value through the plan.
- Above-median income that fails the means test: You are pushed into Chapter 13 by statute.
- Priority debt that won't discharge: Recent income tax, trust fund tax, child support arrears, alimony arrears. Chapter 13 spreads these over the plan term and prevents continued enforcement action.
- Prior Chapter 7 discharge within the last 8 years: Chapter 13 is available 4 years after a Chapter 7 discharge.
What the Costs Really Look Like
Chapter 7's $1,500 to $2,800 total cost is paid up front, before the petition is filed. Attorneys won't take a Chapter 7 case on credit because they can't collect after the filing (the fee would be a discharged unsecured claim). Most attorneys offer payment plans before filing.
Chapter 13 costs more but is structured differently. The filing fee is $313, paid at filing or in installments. Attorney fees of $4,000 to $5,500 are typically paid through the plan itself, which means the bulk of the fee is funded out of monthly plan payments rather than a lump sum at the start. Many districts have "no-look" or "presumptively reasonable" attorney fees that cover standard work without a separate fee application.
Trustee fees in Chapter 13 are a percentage of plan payments (typically 5 to 10 percent, capped at 10 percent by 28 U.S.C. § 586(e)). These are funded by the plan, not paid out of pocket.
What Each Chapter Discharges
Both chapters discharge most general unsecured debt. Chapter 13 has a slightly broader discharge than Chapter 7, though the practical difference for most cases is small. Chapter 13's "super discharge" historically covered debts incurred through fraud and certain other categories that Chapter 7 cannot discharge, but the 2005 BAPCPA reforms narrowed this difference considerably.
Both chapters leave these debts intact:
- Most student loans (federal and private)
- Recent income tax
- Trust fund and payroll taxes
- Domestic support obligations
- Criminal restitution and most government fines
- Debts incurred through fraud (with limited Chapter 13 exceptions)
Chapter 13's advantage is not what it discharges; it is that it can pay nondischargeable priority debt over 3 to 5 years while the automatic stay prevents enforcement.
A Practical Decision Flow
- Run the means test. Below-median income means Chapter 7 is available; above-median means Chapter 13 may be required.
- List your assets and check them against your state's exemption list. Nonexempt assets push toward Chapter 13.
- List your debts by category. Heavy priority debt or mortgage arrears push toward Chapter 13.
- Check the discharge waiting period from any prior bankruptcy.
- Compare attorney quotes from at least two consumer bankruptcy attorneys. Both Chapter 7 and Chapter 13 quotes are usually standardized in a given district.
For the broader comparison of bankruptcy against other debt tools, see our bankruptcy overview, bankruptcy versus settlement, and bankruptcy versus DMP guides.
FAQ
Can I switch from Chapter 13 to Chapter 7?
Yes, conversion is allowed under 11 U.S.C. § 1307(a). About 1 in 3 Chapter 13 cases converts to Chapter 7 when a job loss, medical crisis, or other change makes the plan payments impossible. You file a notice of conversion, pay a conversion fee (about $25), and the case proceeds as a Chapter 7 from there. You must still pass the means test at conversion if your circumstances changed.
Can the court force me into Chapter 13 if I want Chapter 7?
Effectively yes, through the means test. If your income is above the state median and your disposable income after IRS-allowed expenses exceeds the formula threshold, the court will dismiss your Chapter 7 case as an abuse of the statute (11 U.S.C. § 707(b)(2)). You can then voluntarily convert to Chapter 13 or accept the dismissal.
How much equity can I have in my home in Chapter 7?
Up to your state's homestead exemption amount, which varies wildly: $0 in some states, $27,900 under the federal exemption, $250,000 in Massachusetts and Nevada, unlimited in Florida and Texas (subject to acreage and lookback rules). Equity above the exemption is at risk in Chapter 7. Chapter 13 lets you keep equity above the exemption by paying creditors at least what they would have received in a Chapter 7 liquidation.
What is the Chapter 13 'cramdown' and when does it apply?
Cramdown lets you reduce a secured debt to the value of the collateral and discharge the remaining unsecured portion. It applies to car loans on vehicles purchased more than 910 days before filing (11 U.S.C. § 1325(a)(*)), to investment property mortgages, and to certain other secured debts. A $20,000 car loan on a vehicle now worth $12,000 becomes a $12,000 secured claim paid through the plan, with the $8,000 difference treated as unsecured and discharged at plan completion. Cramdown is one of the most powerful tools Chapter 13 offers that Chapter 7 does not.
How long do I have to wait between filings?
Chapter 7 after Chapter 7: 8 years from prior filing date (11 U.S.C. § 727(a)(8)). Chapter 13 after Chapter 7: 4 years. Chapter 7 after Chapter 13: 6 years, unless the Chapter 13 paid at least 70 percent of unsecured claims. Chapter 13 after Chapter 13: 2 years. Multiple filings within these windows are allowed but the second one won't produce a discharge.
Will Chapter 13 stop a foreclosure?
Yes if filed before the foreclosure sale completes. The automatic stay halts the sale, and the plan can cure mortgage arrears over the 3 to 5 year plan period while you stay current on the regular payment. This is one of the most common reasons to choose Chapter 13 over Chapter 7. Chapter 7's stay also stops the sale but cannot cure arrears, so you would still need to catch up on missed payments outside the bankruptcy.
Sources
- Bankruptcy Code (Title 11): Cornell LII.
- Means test: 11 U.S.C. § 707(b), U.S. Trustee Program.
- Chapter 13 debt limits: 11 U.S.C. § 109(e), indexed every 3 years; current figures from U.S. Courts Chapter 13 Basics.
- Conversion between chapters: 11 U.S.C. §§ 706 and 1307, Cornell LII.
- Trustee fee cap: 28 U.S.C. § 586(e), Cornell LII.
- Cramdown rule for vehicles: 11 U.S.C. § 1325(a) hanging paragraph; Cornell LII.
- Bank of America v. Caulkett (no lien strip in Chapter 7): 575 U.S. 790 (2015), Supreme Court opinion.