1. Introduction
Quick Answer: Most guides frame Chapter 7 vs Chapter 13 as a personality question: wipe-the-slate or pay-it-back. It is not. It is an eligibility test followed by an asset test, and both have published numbers you can check today. DollarVisor shows the numbers.
Nobody picks a bankruptcy chapter the way they pick a checking account. By the time the question comes up, something has already gone wrong: a job, a hospital bill, a business that stopped covering its costs.
So the useful version of this comparison is mechanical, not philosophical. Your state has a published income line and published exemption rules. Those two facts decide most cases before anyone talks strategy.
This guide covers who qualifies, what each chapter costs, what happens to your house and car, what the filing data shows, and how to decide in order.
A short explainer before we get into those numbers.
2. Chapter 7 vs Chapter 13: what actually differs
Quick Answer: Chapter 7 sells what the law lets a trustee sell, then wipes the rest of your qualifying debt in four to six months. Chapter 13 sells nothing and routes your spare income into a three-to-five-year court plan. One trades property for speed, the other years for control. See our borrowing and debt hub.
The federal courts call Chapter 7 liquidation and Chapter 13 individual debt adjustment. Both stop collection calls the day you file. After that they diverge on almost everything.
| What it decides | Chapter 7 | Chapter 13 |
|---|---|---|
| Who can file | Income at or under your state median, or you pass the full means test | Anyone with regular income, within the statutory debt limits |
| How long it runs | About 4 to 6 months | 3 or 5 years, set by your income |
| Your property | Anything above your state exemptions can be sold | You keep everything |
| Monthly payment | None | Your disposable income, every month, no misses |
| Court filing fee | $338 | $313 |
| Missed mortgage payments | Still owed after the case | Spread across the plan |
| Filing again | 8 years between Chapter 7 discharges | 2 years between Chapter 13 discharges |
| On your credit file | Up to 10 years | Usually 7, up to 10 by law |
Source: DollarVisor analysis of Bankruptcy Basics and the court filing fees published by the U.S. Bankruptcy Court. Credit reporting limits under the Fair Credit Reporting Act.
Not sure you need to file at all?
Plenty of households that ask this question turn out to have a cheaper exit. Work through the five bankruptcy alternatives first →
3. Do you even get to choose? The means test line in your state
Quick Answer: Chapter 7 has an income gate. If your household’s six-month average income sits at or below your state’s median for your family size, you pass and stop testing. Above it, you complete a longer form that subtracts allowed expenses. The line is published, state-specific, and moves twice a year. Check it before you rule out the cheaper options short of filing.
The Justice Department’s U.S. Trustee Program publishes the median family income figures the means test forms use. Same income, different state, different answer: exactly the gap national averages hide.
| State | 1 earner | Household of 4 |
|---|---|---|
| California | $79,253 | $139,071 |
| New York | $73,272 | $139,040 |
| Pennsylvania | $72,230 | $135,862 |
| Florida | $69,876 | $114,761 |
| Georgia | $68,478 | $123,481 |
| Texas | $66,837 | $117,962 |
| Ohio | $66,239 | $123,702 |
| Mississippi (lowest) | $53,978 | $97,464 |
Source: DollarVisor analysis of the Census Bureau median family income table published by the U.S. Trustee Program for cases filed on or after July 15, 2026. Add $11,100 for each household member above four.
A single filer earning $60,000 clears the line in Texas and Ohio but faces the longer form in Mississippi. Nothing about that household changed except the state. In Chapter 7 vs Chapter 13, that alone can decide the chapter.
Two things people get wrong here:
- It looks backward, not forward. It averages the six full months before you file, so a recent layoff may not show up yet. Waiting one month can flip the result.
- Failing the median is not failing the test. Above-median filers move to the long form, where mortgage, car, tax and childcare costs come off the top.
4. What happens to your house, your car and your stuff
Quick Answer: In Chapter 7 a trustee can sell anything worth more than your state’s exemption covers. In Chapter 13 nothing gets sold. That difference decides the chapter for homeowners with equity and for anyone behind on a car loan they can no longer afford.
Exemptions are state law and they vary enormously. Some states protect unlimited home equity; others protect a five-figure slice. On Chapter 7 vs Chapter 13, here is how the three assets people worry about actually differ:
- Your home. Chapter 7 pauses a foreclosure, it does not stop one. Chapter 13 spreads the missed payments across the plan while you resume the regular payment.
- Your car. Chapter 7 keeps it only if you are current and the equity fits your exemption. Chapter 13 can cure the arrears, and sometimes cut the loan to what the car is worth.
- Everything else. Tools, a second vehicle, a tax refund, an inherited account. All fair game in Chapter 7 if they sit outside your exemptions.
Most Chapter 7 cases are “no asset” cases where the trustee sells nothing at all. The chapter earns its reputation from the minority of filers who own something exposed.
5. Chapter 7 vs Chapter 13: which one Americans file
Quick Answer: Filings are climbing on both sides, but Chapter 7 faster. Chapter 13’s share peaked at 42% in 2023 and has slipped every year since, to 36% in the year ending June 2026. Where Chapter 7 vs Chapter 13 is a real choice, more households take the fast exit. See our loans and debt coverage.
| Year ending June 30 | Chapter 7 | Chapter 7 scale | Chapter 13 | Chapter 13 share |
|---|---|---|---|---|
| 2022 | 239,750 | 136,169 | 36.2% | |
| 2023 | 239,125 | 173,362 | 42.0% | |
| 2024 | 284,975 | 192,421 | 40.3% | |
| 2025 | 333,321 | 200,290 | 37.5% | |
| 2026 | 382,161 | 215,490 | 36.1% |
Source: DollarVisor analysis of filings by chapter reported by the Administrative Office of the U.S. Courts in Bankruptcies Rise 12.2 Percent, July 2026. Share is Chapter 13 as a percentage of Chapter 7 and Chapter 13 combined.
Both chapters grew about 58% in four years, but Chapter 13 has lost share every year since its 2023 peak. That bulge lines up with the end of pandemic-era foreclosure protections, when many households filed Chapter 13 to save a home.
6. Chapter 7 vs Chapter 13 on what it costs to start
Quick Answer: Court fees are nearly identical: $338 for Chapter 7, $313 for Chapter 13. The real difference is when you pay the lawyer. Chapter 7 attorneys want the fee before filing; Chapter 13 fees mostly ride inside the plan. That is why the cheaper chapter is often the harder one to start, unlike debt settlement programs.
| Cost | Chapter 7 | Chapter 13 | When it lands |
|---|---|---|---|
| Court filing fee | $338 | $313 | At filing, or in installments |
| Fee waiver available | Yes, under 150% of poverty guidelines | No | Decided at filing |
| Credit counseling course | Required | Required | Within 180 days before filing |
| Attorney fee, typical structure | Flat fee, usually paid in full first | Higher, but largely paid inside the plan | Before filing vs over 3–5 years |
| Trustee commission | None from you | A percentage of every plan payment | Every month of the plan |
Filing fees, installment option and fee waiver rules per the U.S. Bankruptcy Court fee page. Attorney fee and trustee commission rows are an illustrative structural model: actual amounts vary by district and are set or reviewed by the court.
That last column traps people. A household with no savings often cannot raise a Chapter 7 flat fee, so it lands in a plan it can barely sustain. That is Chapter 7 vs Chapter 13 decided by cash flow, not by law.
Still carrying debt you could refinance instead?
If your credit has not collapsed yet, one loan at a fixed rate may beat either chapter. Compare debt consolidation loan rates →
7. Show the math: $42,000 of card debt, five ways out
Quick Answer: Run one household through every exit and the ranking stops being opinion. On $42,000 of card debt at 22%, minimum payments cost about $118,000 over 37 years. A five-year Chapter 13 plan at $250 a month costs $15,000. Snowball and avalanche payoff methods only help if you can afford the payment.
| Route | Monthly | How long | Total cash paid | The catch |
|---|---|---|---|---|
| Minimum payments | $490, falling | 36.8 years | $117,933 | Almost three times the balance in interest |
| Pay it off in five years | $1,160 | 5 years | $69,600 | Needs $1,160 free every month |
| Debt settlement | ~$630 | ~4 years | ~$30,240 | Forgiven debt can be taxable; creditors can still sue |
| Chapter 13 plan | $250 | 5 years | $15,313 | Miss payments and the case can be dismissed |
| Chapter 7 discharge | $0 | 4–6 months | $338 plus fees | Must pass the means test; assets can be sold |
Modeled projection by DollarVisor. Minimum payment assumes 1% of balance plus interest at 22% APR. Settlement assumes creditors accept 50% and a 22% program fee on enrolled debt. Chapter 13 assumes $250 monthly disposable income across a 60-month plan. Filing fees per the U.S. Bankruptcy Court. Illustrative only; your numbers will differ.
Two caveats. Chapter 13’s $15,313 is that low only because this household has $250 a month of disposable income: earn more and the payment rises with it. And Chapter 7 is not really free if you own equity a trustee can reach.
8. Chapter 7 vs Chapter 13: when the slower chapter wins
Quick Answer: Choose the slower chapter when it buys something the fast one cannot. Stopping a foreclosure, keeping a car you are behind on, protecting equity above your exemption, or repaying tax and support arrears over time are all Chapter 13 jobs, as our debt guides explain. Chapter 7 does none of them.
Five situations where the longer chapter is the smarter move:
- You are behind on the mortgage and want the house. The plan spreads the arrears; Chapter 7 leaves them due in full.
- Your home equity exceeds your state exemption. The plan protects it by paying creditors at least what a sale would have returned.
- You owe recent income tax or support arrears. Neither is dischargeable, but a plan repays them without penalties piling up.
- A co-signer is on the hook. Chapter 13 has a co-debtor stay that Chapter 7 does not.
- You filed Chapter 7 within the last eight years. Another Chapter 7 discharge is off the table; Chapter 13 is not.
The reverse holds too. If you rent, own an old car outright and owe nothing but cards and medical bills, five years of payments buys nothing.
9. What neither chapter wipes out
Quick Answer: Child support, alimony, recent taxes, court fines and criminal restitution survive both chapters. So do student loans, unless you file a separate lawsuit and prove undue hardship: the route covered in our guide to discharging student loans in bankruptcy.
The courts publish the full list of exceptions to the bankruptcy discharge. Four categories catch people out:
- Family support. Never dischargeable, and it gets paid first inside a Chapter 13 plan.
- Recent taxes. Older income tax can sometimes go; the last three years generally cannot.
- Secured debt you want to keep. Discharge kills your personal liability, not the lien. Stop paying the car and it still goes.
- Debts you did not list. Leave a creditor off the schedules and that debt can survive the case.
10. What each chapter does to your credit
Quick Answer: The Fair Credit Reporting Act lets any bankruptcy be reported for up to 10 years. The bureaus voluntarily drop completed Chapter 13 cases after 7. That three-year gap is real but small next to how fast scores recover. See how long bankruptcy stays on your credit report.
The statute is blunt: no consumer report may include a bankruptcy that predates the report by more than 10 years. Seven years for Chapter 13 is bureau policy, not law. Two things matter more than the date it falls off:
- Your score was already damaged. Months of missed payments usually do more harm than the filing itself.
- Recovery starts at discharge, not deletion. Chapter 7 filers get there in months. Chapter 13 filers wait years: the hidden credit cost of the longer chapter.
Planning for the other side of the case?
The first two years after discharge decide how quickly you borrow normally again. See the step-by-step credit rebuild plan →
11. How to work through Chapter 7 vs Chapter 13 in order
Quick Answer: Take the questions in sequence and most people reach an answer in under an hour. Total your debts, check your state’s median income line, price your exemptions, name what you must protect, then confirm the cash you can raise before filing. Our debt and borrowing guides cover each input.
- List every debt and sort it. Secured versus unsecured, and flag anything on the never-discharged list.
- Average your last six full months of household income. Everything except Social Security. Compare it to your state’s line for your family size.
- Price what you own against your state exemptions. Home equity, vehicle equity, cash, retirement. Anything uncovered is what a Chapter 7 trustee could reach.
- Name what you must protect. A house in foreclosure, a car you are behind on, a co-signed loan. If nothing makes this list, Chapter 13 has nothing to offer you.
- Check the cash you can raise before filing. Chapter 7 usually wants the fee upfront. Ask about the waiver and installments before defaulting to a plan.
- Get two quotes from attorneys in your district. Local practice varies more than the statute does. Ask each which chapter they would file and why.
12. The verdict
Quick Answer: Chapter 7 vs Chapter 13 is not a close call for most households. Pass your state’s income line and own nothing above your exemptions, and Chapter 7 is faster, cheaper, and lets you rebuild sooner. Chapter 13 earns its five years only when it saves something specific.
Every number here is published and checkable: your state’s median income line, the filing fees, the national filing counts, the ten-year reporting limit. Roughly two-thirds of filers land in Chapter 7, and that share has grown three years running. That is what happens when a lot of people run the same test and get the same answer.
This article is information, not legal or financial advice. Bankruptcy outcomes depend on your state, your district and your own facts: speak with a licensed bankruptcy attorney before filing.
13. Frequently Asked Questions
Is Chapter 7 or Chapter 13 better?
For most households, Chapter 7 wins the Chapter 7 vs Chapter 13 comparison. It ends in four to six months, costs $338 in court fees, and lets credit repair start immediately. Chapter 13 is better only when you must stop a foreclosure, cure a car loan, protect equity above your exemption, or repay debts no chapter can erase.
Can I switch from Chapter 13 to Chapter 7?
Usually yes. Debtors generally have a right to convert a Chapter 13 case to Chapter 7, though you must pass the means test at that point and pay the conversion fee. People do this when income drops and the plan payment stops being realistic.
What happens if I miss a Chapter 13 payment?
The trustee can move to dismiss the case. Dismissal ends the automatic stay, and creditors resume collection on the full original balance, with interest that kept accruing during the plan. It is the biggest risk of the longer chapter.
Does my spouse have to file with me?
No. You can file alone, but the means test still counts your whole household’s income if you live together, and your spouse stays fully liable for any joint debts. That often makes a joint filing cheaper.
How much debt do you need to file bankruptcy?
There is no minimum. Chapter 13 has maximums. The statute caps how much secured and unsecured debt you can carry and still qualify. Chapter 7 has no ceiling at all, only the income test.
Will I lose my retirement savings?
Generally no. Most tax-qualified retirement accounts, including 401(k) plans and IRAs within federal limits, are protected in both chapters. Cashing one out to pay creditors before filing is usually the more damaging move.
Want to know which chapter your numbers point to?
Send us your state, household size, six-month income and what you own outright. We will show you where you sit against your state’s means test line, what your exemptions likely cover, and what each route would cost you. Companies cannot pay for placement in our rankings, and the comparison is free.