Chapter 7 vs Chapter 13 Bankruptcy: Differences, Costs and Eligibility

• Tahir Abbas
• October 29, 2026

Last updated: October 2026

This article is general information, not legal advice. Which chapter fits a particular household depends on state exemption law, income, assets and the type of debt, so a licensed bankruptcy attorney must advise on any specific case.

Key takeaways

• Chapter 7 discharges debts quickly but may cost you non-exempt property; Chapter 13 lets you keep property and catch up on a mortgage over time.
• Chapter 7 requires passing (or being exempt from) the means test; Chapter 13 requires regular income and debts under the statutory limits.
• Court filing fees as of October 2026: $338 for Chapter 7 and $313 for Chapter 13, before any attorney fees (see the fee table below).
• Both chapters require credit counseling from an approved agency within 180 days before filing.
• A case can be converted from Chapter 7 to Chapter 13, and from Chapter 13 to Chapter 7, if you qualify for the new chapter.

What is the main difference between Chapter 7 and Chapter 13?

The federal courts describe Chapter 7 as “liquidation”: the sale of a debtor’s non-exempt property and the distribution of the proceeds to creditors. In practice most individual cases are “no asset” cases, meaning everything the debtor owns is exempt or tied up in valid liens, so there is nothing to distribute. The courts note that most Chapter 7 cases involving individuals are no-asset cases, and that individual debtors receive a discharge in more than 99 percent of Chapter 7 cases that are not dismissed or converted (U.S. Courts, Chapter 7 Bankruptcy Basics).

Chapter 13 works differently. It is called a “wage earner’s plan”: you propose a plan to repay all or part of your debts through a Chapter 13 trustee, usually over three to five years, and you generally keep your property while you do it. The discharge comes at the end, after you complete the payments (U.S. Courts, Chapter 13 Bankruptcy Basics).

How do Chapter 7 and Chapter 13 compare side by side?

Sources: U.S. Courts Chapter 7 and Chapter 13 Bankruptcy Basics (linked above); fees from the Bankruptcy Court Miscellaneous Fee Schedule, see the cost section. The debt limits are the figures shown on the U.S. Courts Chapter 13 page in October 2026 and are adjusted periodically.

Who qualifies for Chapter 7?

Chapter 7 relief is available regardless of how much you owe, subject to the means test for individuals. Under the means test, if your “current monthly income” is more than your state median, the Bankruptcy Code asks whether filing under Chapter 7 is presumed to be an abuse. Current monthly income is the average monthly income received over the six calendar months before filing, and it includes regular contributions to household expenses from other people and a spouse’s income on a joint petition, but not Social Security income (U.S. Courts).

Individuals use Official Forms 122A-1 and 122A-2 for this calculation, and the U.S. Trustee Program publishes the Census Bureau and IRS data the forms rely on, by filing date (U.S. Trustee Program, Means Testing). If a debtor’s income is over the threshold, the court may dismiss the case, and the debtor can instead reorganize under Chapter 13. For the document side of this step, see our Chapter 7 means test documents checklist.

Other conditions apply to every chapter:

• You must have received credit counseling from an approved agency within the 180 days before filing, with limited exceptions. The U.S. Trustee Program keeps the approved-agency lists (credit counseling and debtor education information).
• You cannot file if, in the preceding 180 days, a prior case was dismissed for willful failure to appear or obey court orders, or you voluntarily dismissed it after creditors sought relief to recover property.
• A Chapter 7 discharge is barred if you received a discharge in a case commenced within 8 years before the new petition (11 U.S.C. § 727(a)(8)). If your earlier discharge was in Chapter 13, the look-back is six years, with an exception when the plan paid enough (§ 727(a)(9)).

Who qualifies for Chapter 13?

Any individual with regular income, including someone who is self-employed or runs an unincorporated business, can file as long as unsecured debts are under $526,700 and secured debts are under $1,580,125 on the filing date (U.S. Courts; the underlying rule is 11 U.S.C. § 109(e)). The same credit counseling and prior-dismissal rules apply.

The length of the plan follows income. If current monthly income is below the state median for your household size, the plan runs three years unless the court approves longer for cause. If it is above the median, the plan generally runs five years. No plan can run longer than five years. The plan must also pay unsecured creditors at least what they would have received if your assets had been liquidated in Chapter 7, and it must commit your projected disposable income for the applicable period.

What do Chapter 7 and Chapter 13 cost?

Court fees are set by statute and the judiciary’s fee schedule. As of October 2026, per 28 U.S.C. § 1930 and the Bankruptcy Court Miscellaneous Fee Schedule (effective December 1, 2023):

Two notes on these numbers. First, the narrative text of the U.S. Courts basics pages still shows a $75 administrative fee; the fee schedule lists $78, and we use the schedule. Second, these are court fees only. Attorney fees, credit counseling and debtor education course fees are separate, vary by provider and region, and are not set by the courts, so we do not give a figure for them here.

Individuals may ask the court to pay in installments: up to four installments, with the final one due no later than 120 days after filing (the court can extend for cause to 180 days). In Chapter 7, if income is below 150% of the poverty level and you cannot pay even in installments, the court may waive the fee (28 U.S.C. § 1930(f)). The Chapter 13 cost that is not on any fee schedule is the plan itself, because you are repaying debt through the trustee over the plan’s life.

Worked example: filing costs and a plan payment

This is an illustration with made-up household numbers, not a prediction.

1. Chapter 7 court fees: $245 + $78 + $15 = $338. Paid in four equal installments (with court permission): $338 ÷ 4 = $84.50 each.
2. Chapter 13 court fees: $235 + $78 = $313. The difference from Chapter 7 is $338 − $313 = $25.
3. Chapter 13 mortgage catch-up: suppose a household is $12,000 behind on its mortgage and the plan runs the full 60 months. The arrears portion is $12,000 ÷ 60 = $200 per month, paid through the trustee on top of the regular mortgage payments that come due during the plan. Other plan costs (car loans, priority taxes, the minimum owed to unsecured creditors) would add to this, which is why the real number needs an attorney’s calculation.

The point of the example: the court filing fees are nearly identical, so the real cost difference between the chapters is what happens after filing, namely liquidation risk in Chapter 7 versus five years of plan payments in Chapter 13.

What happens to your house, car and other property?

In Chapter 7 the Bankruptcy Code lets you keep “exempt” property, and the trustee liquidates the rest. Exemptions are often a question of state law, since some states require you to use state exemptions and others let you choose between state and federal sets. The courts advise consulting an attorney to learn which exemptions apply in your state. Secured creditors keep their liens, so if you want to keep a financed car, you may “reaffirm” the debt (a written agreement filed before the discharge), or otherwise arrange to keep paying.

In Chapter 13 you generally keep your property. The automatic stay stops a foreclosure as soon as you file, and you can bring past-due payments current over a reasonable time, but you must still make the regular mortgage payments that come due during the plan. You may still lose the home if the foreclosure sale was completed under state law before you filed. Chapter 13 can also reschedule secured debts other than a primary-residence mortgage over the life of the plan, which may lower payments.

How long do they take, and what gets discharged?

Chapter 7. The creditors’ meeting (the “341 meeting”) is held 21 to 40 days after filing in most cases. The court generally issues the discharge order 60 to 90 days after the date first set for that meeting. Adding the ranges, that is roughly 81 to 130 days after filing in a typical case (21 + 60 = 81; 40 + 90 = 130). That is arithmetic on the court’s stated ranges, not a guarantee, and objections or extensions can lengthen it.

Chapter 13. The creditors’ meeting is held 21 to 50 days after filing, and plan payments to the trustee must begin within 30 days of filing. A confirmation hearing follows. The discharge comes after all plan payments are made, and you must complete an approved financial management course if one is available in your district.

What is not discharged. In both chapters some debts survive, including child support and alimony, certain taxes, most government-funded or government-guaranteed student loans, and debts from death or injury caused by driving while intoxicated. The Chapter 13 discharge is somewhat broader: it can cover debts for willful and malicious injury to property, debts incurred to pay non-dischargeable taxes, and property-settlement debts from divorce, which Chapter 7 does not discharge.

Can you switch chapters, or file again later?

Yes. A Chapter 7 debtor can convert to Chapter 13 if eligible, and the courts state there is no fee for converting from Chapter 7 to Chapter 13. A Chapter 13 debtor who cannot complete the plan, or whose plan is not confirmed, may convert to Chapter 7. A debtor generally cannot keep converting a case back and forth.

Waiting periods between discharges depend on the chapters involved. A Chapter 13 discharge is not available if you received a discharge in a Chapter 13 case filed within the previous two years, or in a Chapter 7, 11 or 12 case filed within the previous four years (U.S. Courts). The Chapter 7 look-back periods are in the eligibility section above.

FAQ

Is Chapter 7 or Chapter 13 better?

Neither is better in general. Chapter 7 is faster and does not require a repayment plan, but it may involve losing non-exempt property and is limited by the means test. Chapter 13 can protect a home from foreclosure and handle debts you cannot discharge quickly, but it commits you to years of payments. A bankruptcy attorney can compare both against your state’s exemptions and your numbers.

Can I file Chapter 7 if I make too much money?

If your current monthly income is above the state median, the means test applies and the case may be presumed abusive. Debtors above the thresholds can often file under Chapter 13 instead. Some debtors, such as those whose debts are not primarily consumer debts, are not subject to the means test.

Which chapter keeps my house?

Chapter 13 is the chapter designed to let you catch up on a mortgage over time and stop a pending foreclosure. In Chapter 7 the trustee liquidates non-exempt property and the lender keeps its lien, and the court’s materials warn that a Chapter 7 filing may result in the loss of property.

How much does it cost to file Chapter 7 versus Chapter 13?

As of October 2026, court fees are $338 for Chapter 7 ($245 filing fee, $78 administrative fee, $15 trustee surcharge) and $313 for Chapter 13 ($235 filing fee and $78 administrative fee), per 28 U.S.C. § 1930 and the judiciary’s fee schedule. Attorney and course fees are extra and vary.

Do I have to take a class in both chapters?

Yes, two courses are involved. Credit counseling must be completed before filing, and a separate debtor education (financial management) course must be completed after filing, with limited exceptions, to receive a discharge. Approved providers are listed by the U.S. Trustee Program.

Can I file without a lawyer?

You may represent yourself, but the courts warn that the scope of a discharge is subject to many exceptions and recommend consulting counsel before filing. A licensed attorney should advise on any specific case.

Where to go next

If you are an attorney or a small firm that prepares Chapter 7 and Chapter 13 filings, Softotech supports attorneys with petition preparation (attorney-supervised: you review, sign and file). See our bankruptcy paralegal services for what the support covers, and use these checklists while you gather client documents: the means test documents checklist and the Statement of Financial Affairs checklist (Form 107). For other practical calculators, browse our free tools. Softotech does not provide legal advice and does not replace a licensed attorney.