Chapter 7 vs. Chapter 13: Which Bankruptcy Fits?
Chapter 7 wipes out most unsecured debts, like credit cards and medical bills, usually within a few months, but a court-appointed trustee can sell property the law doesn't protect. Chapter 13 lets you keep your property and pay part of what you owe through a three-to-five-year plan, and it's the one that can let you catch up on a mortgage. Your income decides which you can use.
More people are filing. Bankruptcy filings over the 12 months through the second quarter of 2026 were 12.2% higher than a year earlier, according to the Administrative Office of the U.S. Courts.
What's the difference between Chapter 7 and Chapter 13?
Chapter 7 is a quick wipeout; Chapter 13 is a repayment plan. Side by side:
| Chapter 7 | Chapter 13 | |
|---|---|---|
| Who can use it | If your income is above your state's median, you have to pass the means test. Source U.S. Courts | You need regular income, and debts under the limits: $526,700 unsecured and $1,580,125 secured. Source Federal Register |
| How long | The A court order that permanently eliminates your legal obligation to pay certain debts at the end of a successful bankruptcy case. Learn more → , the court order that wipes out the debts, generally comes 60 to 90 days after the creditors' meeting, which is held 21 to 40 days after you file. Source U.S. Courts | Three years if your income is below your state's median, generally five if it's above. Source U.S. Courts |
| Your property | A A neutral third party who handles the foreclosure sale in non-judicial foreclosure states. Also manages bankruptcy cases. Learn more → sells what the law doesn't protect and pays your creditors. Source U.S. Courts | You keep your property and pay creditors from your income. Source U.S. Courts |
| Your house | It can pause a foreclosure while the case lasts, but it doesn't catch you up, and the mortgage stays on the house. Source U.S. Courts | You can catch up on missed payments over the plan while paying each new one. Source U.S. Courts |
| Court fee | $338 Source Fee schedule | $313 Source Fee schedule |
| On your credit report | Up to 10 years Source 15 U.S.C. § 1681c | Up to 10 years Source 15 U.S.C. § 1681c |
Can bankruptcy stop a foreclosure?
It usually pauses one while the case lasts, but it doesn't make the mortgage go away. Filing puts an A bankruptcy protection that generally pauses collection, foreclosure, and some lawsuits when a case is filed. Learn more → in place: by law, without a judge signing anything, most collection has to stop, foreclosure included Source U.S. Courts. The mortgage stays attached to the house after the case Source U.S. Courts.
- In Chapter 7, the pause is temporary. To keep the house you have to keep paying, and your mortgage company can ask the court to lift the stay.
- In Chapter 13, you can pay off what you missed over the plan while making each new payment Source U.S. Courts.
- If you had a case dismissed in the past year, the stay may last only 30 days. With two or more, it may not start at all Source 11 U.S.C. § 362(c).
- If the foreclosure sale is already finished before you file, filing may not save the house Source U.S. Courts.
Before you file to save a house, ask your mortgage company about a loan modification or a payment plan. A HUD-approved housing counselor will go through those with you for free. More: what to do when you're behind and how to stop a foreclosure.
Which debts does bankruptcy wipe out?
Most unsecured debts: credit cards, medical bills, personal loans, and the leftover balance after a foreclosure or repossession. Some debts usually survive Source 11 U.S.C. § 523:
- Child support and alimony
- Most recent income taxes
- Student loans, unless you prove "undue hardship" in a separate case
- Debts from fraud, and criminal fines
- Luxury purchases of more than $900 from one creditor in the 90 days before filing, which are presumed not to be wiped out
A discharge stops those creditors from collecting the erased debts from you personally. A lender with a lien, like your mortgage company, can still go after the property Source 11 U.S.C. § 524.
What do I get to keep in bankruptcy?
More than most people expect. Each state has its own list of protected property, called exemptions, and decides whether you may use the federal list instead Source 11 U.S.C. § 522(b). The federal amounts, for cases filed since April 1, 2025:
| What it protects | Up to |
|---|---|
| Equity in the home you live in | $31,575 |
| Equity in one car | $5,025 |
| Household goods and clothes | $800 an item, $16,850 in all |
| Tools of your trade | $3,175 |
| Anything else (the "wildcard") | $1,675, plus up to $15,800 of unused home exemption |
| IRAs and Roth IRAs | $1,711,975; most workplace retirement plans are protected without a cap |
Amounts from the Judicial Conference's adjustment in the Federal Register, which applies to cases filed from April 1, 2025 Source Federal Register. Your state's page lists its own exemptions.
Do I qualify for Chapter 7?
You qualify if your income is below your state's median, or if the means test shows you can't repay. It applies when your debts are mostly consumer debts, and some veterans are exempt Source 11 U.S.C. § 707.
- Is your income below your state's median? Add up your household income for the past six months and double it. If that's below the median for your household size, you pass.
- If not, how much is left after allowed expenses? If less than about $171 a month, you pass. If more than about $286, the law presumes you can repay, and Chapter 13 may be the path. In between, it depends on how much unsecured debt you have.
How much does it cost to file bankruptcy?
The court fee is $338 for Chapter 7 and $313 for Chapter 13 Source Fee schedule Source 28 U.S.C. § 1930. The court can let you pay in installments, and a Chapter 7 fee can be waived if your income is low enough Source 28 U.S.C. § 1930(f). Lawyers' fees come on top and vary, so get the fee in writing before you hire one. The credit counseling course you need before filing must charge a reasonable fee, and the agency has to help you even if you can't pay Source 11 U.S.C. § 111.
How long does bankruptcy stay on your credit report?
Up to 10 years from the filing, for either chapter Source CFPB. These are the usual waits for a new mortgage:
| Loan | After Chapter 7 | After Chapter 13 |
|---|---|---|
| FHA | Generally 2 years after the discharge; 1 year can work if the bankruptcy came from circumstances beyond your control Source HUD Handbook 4000.1 | Possible 1 year into the plan, with the court's OK Source HUD Handbook 4000.1 |
| Fannie Mae | 4 years; 2 with documented extenuating circumstances Source Fannie Mae B3-5.3-07 | 2 years after the discharge Source Fannie Mae B3-5.3-07 |
Are more people filing for bankruptcy?
Yes. Filings over the 12 months through the second quarter of 2026 were 12.2% higher than a year earlier. Chapter 7 is the more common choice: for every Chapter 13 case there were about 1.8 Chapter 7 cases (1.77), up from 1.66 a year earlier Source U.S. Courts F-2. The counts show how many cases were filed, not why people filed or how their cases ended.
More Chapter 7 cases for every Chapter 13 case than a year earlier
Chapter 7 cases for every Chapter 13 case, 12-month filing totals, United States: 1.77 in Q2 2026. Quarterly, Q2 2017 to Q2 2026.
The full record is on our bankruptcy statistics page.
How do I file for bankruptcy?
Take a credit counseling course, gather your records, file, meet the trustee, then take a second course. Step by step:
- Credit counseling, within 180 days before you file, from an approved agency, with a few exceptions Source 11 U.S.C. § 109(h).
- Gather your records: pay stubs, tax returns, bank statements, a list of what you own and owe, and your monthly bills.
- File the petition, listing every debt Source 11 U.S.C. § 521. The automatic stay starts.
- The meeting of creditors: the trustee asks you questions under oath, 21 to 40 days after filing in Chapter 7 and 21 to 50 in Chapter 13 Source U.S. Courts.
- A debtor education course, separate from the first one, before the discharge Source 11 U.S.C. § 727(a)(11) Source § 1328(g). Then the discharge: a few months in for Chapter 7, when the plan is done for Chapter 13.
Questions about bankruptcy
Can I file bankruptcy without a lawyer?
Yes. Filing on your own is called filing pro se. The federal courts strongly recommend a lawyer, because mistakes can affect your rights. Legal aid offices give free help if your income qualifies; see free help.
How many times can you file for bankruptcy?
The limits are on getting another discharge, counted from the earlier filing date, not on filing. A Chapter 7 discharge blocks another Chapter 7 discharge for 8 years and a Chapter 13 discharge for 4 years. A Chapter 13 discharge blocks another Chapter 13 discharge for 2 years, and a Chapter 7 discharge for 6 years unless the earlier plan paid enough.
Does bankruptcy clear student loans?
Usually not. A student loan is wiped out only if you prove "undue hardship" in a separate case within the bankruptcy. A bankruptcy lawyer can tell you whether you might qualify.
Can I keep my house in Chapter 7?
If your equity fits within your exemption and you keep paying. Signing a reaffirmation agreement is a separate choice: it makes you personally liable for the loan again, and the law lets the lender keep taking your regular payments without one. If you're behind, Chapter 13 is the chapter that lets you catch up.
Can my employer fire me for filing bankruptcy?
A private employer can't fire you only because you filed. If you hold a security clearance, ask your lawyer first.
Should I file for bankruptcy?
That's a decision for you, ideally with a bankruptcy lawyer or legal aid. Bankruptcy is built for debts you can't repay. It usually won't erase student loans, child support or recent taxes. The credit counseling session you need before filing anyway goes through your other options first.
What does your state protect?
Your state's page lists its homestead exemption and other protections, with the law behind them.
- Alabama
- Alaska
- Arizona
- Arkansas
- California
- Colorado
- Connecticut
- Delaware
- District of Columbia
- Florida
- Georgia
- Hawaii
- Idaho
- Illinois
- Indiana
- Iowa
- Kansas
- Kentucky
- Louisiana
- Maine
- Maryland
- Massachusetts
- Michigan
- Minnesota
- Mississippi
- Missouri
- Montana
- Nebraska
- Nevada
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Ohio
- Oklahoma
- Oregon
- Pennsylvania
- Rhode Island
- South Carolina
- South Dakota
- Tennessee
- Texas
- Utah
- Vermont
- Virginia
- Washington
- West Virginia
- Wisconsin
- Wyoming
Protect yourself from scams
The FTC and CFPB describe these warning signs and the rules behind them:
- Upfront fees for promised relief are a warning sign. Under FTC mortgage-assistance rules, most companies that sell mortgage help cannot charge until a homeowner accepts a written offer from the mortgage company or lender. A separate FTC rule covers debt-relief companies that sell by phone and ties fees to a completed debt arrangement. It bars a fee until at least one debt has been settled or changed, the customer agrees to the arrangement, and the customer has made a payment under it. The FTC describes a narrow exception for lawyers who give help as part of the practice of law and are licensed in the state where the client or dwelling is. The lawyer follows that state's rules for attorneys, and advance fees are placed in a client trust account before services begin under state trust-account rules.
- HUD-approved foreclosure-prevention counseling is free. HUD’s national counselor line is 800-569-4287. The CFPB counselor finder lists agencies and their services. If an organization charges for help described as free HUD counseling, the CFPB finder can verify the agency and its listed services before any payment.
- A request to sign over a deed is a warning sign. The CFPB identifies title-transfer schemes among foreclosure-relief scams. Signing over title can mean losing ownership of the home; a lawyer can explain what a proposed document would do.
- Only attorneys can give bankruptcy legal advice. "Petition preparers" can type forms but cannot advise you on which chapter to file, what to exempt, or how to handle secured debt. Bad advice here can cost you your home or car.
Free help before you decide
Legal aid. Legal aid offices give free legal help to people with low incomes, including help with bankruptcy. Find yours at lsc.gov or in our directory. If your income is too high for legal aid, your state's page links the state bar's lawyer referral line.
Credit counseling. The U.S. Trustee Program, part of the Justice Department, lists the approved credit counseling agencies for the course you need before filing.
If you're behind on a mortgage too, a HUD-approved housing counselor, a nonprofit adviser approved by the federal housing department, goes through your options with your mortgage company for free: 800-569-4287.
You now know what each chapter does, what it does to a house, what you keep and what it costs. Debts usually pile up after something you couldn't control, and using a law Congress wrote for that isn't a moral failing. Talk it through with legal aid or a bankruptcy lawyer before you decide.
Sources
What this page relies on (23 sources)
- Administrative Office of the U.S. Courts · Chapter 7 bankruptcy basics, at uscourts.gov
- Administrative Office of the U.S. Courts · Chapter 13 bankruptcy basics, at uscourts.gov
- Administrative Office of the U.S. Courts · Filing without an attorney, at uscourts.gov
- Administrative Office of the U.S. Courts · Bankruptcy court fee schedule, at uscourts.gov
- Federal Register · Bankruptcy dollar amounts from April 1, 2025, at federalregister.gov
- 11 U.S.C. § 109, who can file, and credit counseling, at uscode.house.gov
- 11 U.S.C. § 111, credit counseling agencies, at uscode.house.gov
- 11 U.S.C. § 362, the automatic stay, at uscode.house.gov
- 11 U.S.C. § 521, what you must list, at uscode.house.gov
- 11 U.S.C. § 522, exemptions, at uscode.house.gov
- 11 U.S.C. § 523, debts a discharge doesn’t cover, at uscode.house.gov
- 11 U.S.C. § 524, what a discharge does, at uscode.house.gov
- 11 U.S.C. § 525, employers, at uscode.house.gov
- 11 U.S.C. § 707, the means test, at uscode.house.gov
- 11 U.S.C. § 727, Chapter 7 discharge, at uscode.house.gov
- 11 U.S.C. § 1328, Chapter 13 discharge, at uscode.house.gov
- 28 U.S.C. § 1930, filing fees and waivers, at uscode.house.gov
- Consumer Financial Protection Bureau · How long information stays on your credit report, at consumerfinance.gov
- HUD Handbook 4000.1, FHA waits after bankruptcy, at hud.gov
- Fannie Mae Selling Guide B3-5.3-07, waits for a new loan, at selling-guide.fanniemae.com
- U.S. Department of Justice U.S. Trustee Program · Approved credit counseling agencies, at justice.gov
- Legal Services Corporation · Get legal help, at lsc.gov
- Administrative Office of the U.S. Courts · Table F-2, at uscourts.gov
We write with assistance from AI tools. Figures come from the data and sources named on this page.