Your lawyer says Chapter 7 or Chapter 13, and neither number means anything to you.
Short answer: Chapter 7 is a quick liquidation: a trustee can sell property that is not protected, and most remaining debts are wiped out in a few months. Chapter 13 is a 3 to 5 year repayment plan that lets you keep your property while you pay back part of what you owe. Your income, your property and whether you are behind on a mortgage decide which one fits.
This page uses the US Courts Chapter 7 page, the US Courts Chapter 13 page, a federal court fee schedule and TransUnion for credit reports. Talk to a bankruptcy attorney before you file.
You are not alone in considering it. US bankruptcy filings rose 12.2% to 608,511 in the 12 months to 30 June 2026, including 382,161 under Chapter 7 and 215,490 under Chapter 13, according to the US Courts. More numbers are in our debt statistics.
Chapter 7 in plain English
It is a liquidation: the trustee sells nonexempt property and distributes the money to creditors, while you keep exempt property (US Courts). The creditors meeting is held 21 to 40 days after filing, and the discharge usually comes 60 to 90 days after the date first set for that meeting. More than 99 percent of Chapter 7 cases that are not dismissed or converted end in a discharge (US Courts).
If your income is above your state median, a means test applies and the court can presume abuse (US Courts). That test is why some people are pushed toward Chapter 13.
Chapter 13 in plain English
You make fixed payments to a trustee, who pays your creditors, and you generally keep your property. The plan runs 3 years if your income is below the state median and 5 years if it is above, and it cannot exceed 5 years (US Courts). Debt limits apply: unsecured debts under $526,700 and secured debts under $1,580,125 (US Courts).
The trade-off is time: you are tied to a plan for years.
Side by side
| Chapter 7 | Chapter 13 | |
|---|---|---|
| Court fee | $338 | $313 |
| How long | Roughly 3 to 5 months to discharge | 3 to 5 year plan |
| Your property | Nonexempt property can be sold | Generally kept |
| Mortgage arrears | No repayment plan | Can be caught up over the plan |
| On credit reports | Up to 10 years from filing | 7 years from filing |
Fees from a federal court fee schedule effective December 1, 2023; timelines from US Courts; credit report periods from TransUnion. The 3 to 5 month figure is our summary of the 21-40 day meeting plus the 60-90 day discharge window.
TransUnion says the clock starts on the filing date, not the discharge date, and a bankruptcy’s score impact lessens over time (TransUnion).
Before you file
- Get the required credit counseling from an approved agency within 180 days before filing (US Courts).
- Compare other routes first, such as settlement or consolidation and the consolidation calculator.
- Know what collectors and creditors can still do while you decide: your rights, wage garnishment, car repossession and being sued for debt.
Still unsure? Start here
Which chapter is cheaper to file?
The court filing fee is $338 for Chapter 7 and $313 for Chapter 13, per one federal bankruptcy court’s fee schedule effective December 1, 2023 (Washington Western Bankruptcy Court). Attorney fees are on top and vary. You may be able to pay court fees in installments with permission (US Courts).
Will I lose my house or car in Chapter 7?
The trustee sells nonexempt property and you may keep exempt property (US Courts). What counts as exempt depends on the exemption list you use, so ask a bankruptcy attorney about your equity before filing.
What if I’m behind on my mortgage?
That is where Chapter 13 can help. Past-due mortgage payments can be caught up over the plan, but new payments that come due during the plan must also be paid on time (US Courts).
Can I file again later?
There are waiting periods. The US Courts page says a Chapter 13 discharge requires 2 years after a prior Chapter 13 discharge or 4 years after a prior Chapter 7 discharge (US Courts). Check your own history with an attorney.
Which debts does bankruptcy not wipe out?
US Courts lists examples that Chapter 7 does not discharge: alimony and child support, certain taxes, certain student loans, and some court-ordered restitution (US Courts).
Do I have to do anything before I file?
Yes. You need credit counseling from an approved agency within 180 days before filing (US Courts). Nonprofit help is also available through the NFCC at 877-360-6322.
Disclaimer: DebtShift is an educational platform operated by H Ali Logistics Ltd. This article is general education, not legal or financial advice. For free, nonprofit credit counseling, contact the National Foundation for Credit Counseling (NFCC) at nfcc.org or 877-360-6322.
Sources
- US Courts, Chapter 7 Bankruptcy Basics
- US Courts, Chapter 13 Bankruptcy Basics
- US Bankruptcy Court W.D. Washington, Filing fees
- TransUnion, How long does bankruptcy stay on your credit report
Last reviewed October 2026
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