Chapter 7 vs. Chapter 13 Bankruptcy
Chapter 7 and Chapter 13 are the two most common types of personal bankruptcy, structured very differently — one discharges most debt fairly quickly, the other reorganizes debt into a multi-year repayment plan.
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Chapter 7 Bankruptcy
A liquidation bankruptcy that discharges most unsecured debt, typically completed within a few months, subject to a means test and other eligibility requirements.
- Faster process, often completed in a few months
- Discharges most qualifying unsecured debt
- Lower attorney fees than Chapter 13 in most cases
- Eligibility depends on a means test and other requirements
- Certain non-exempt assets may be liquidated
- Not all debts are dischargeable
Chapter 13 Bankruptcy
A reorganization bankruptcy involving a 3–5 year repayment plan, often used when income is too high to qualify for Chapter 7 or to catch up on secured debt like a mortgage.
- Can help catch up on mortgage or car payments and avoid foreclosure/repossession
- Available to filers who don't pass the Chapter 7 means test
- Allows keeping more property in many cases
- Significantly longer process (3–5 years)
- Requires consistent income to make plan payments
- Higher total attorney fees than Chapter 7
Which one makes sense for you?
Chapter 7 is generally faster and less expensive where you qualify, but eligibility and dischargeable debts are limited. Chapter 13 costs more and takes years to complete, but is often the better option when income is too high for Chapter 7 or when the goal is to catch up on a mortgage rather than liquidate assets.
Key cost factors.
- Current income relative to your state's means test threshold
- Whether you're behind on a mortgage or secured debt you want to keep
- Types and total amount of debt involved
- Which assets you want to protect from liquidation
Before you decide.
- Do I pass the means test for Chapter 7 in my state?
- Which of my specific debts would and wouldn't be discharged?
- What property or assets are exempt either way?
Frequently asked questions.
Does bankruptcy clear all types of debt?
No — certain debts like most student loans, recent taxes, and child support are generally not dischargeable in either chapter; an attorney can review which of your specific debts qualify.
All figures on this page are illustrative examples for general education, not quotes, appraisals, or guarantees of actual pricing. Actual costs vary by provider, location, project scope, and market conditions — always get a specific quote before making a purchasing decision.
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