{"id":286920,"date":"2016-04-04T10:41:50","date_gmt":"2016-04-04T15:41:50","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/bankruptcy\/chapter-13\/chapter-13-vs-chapter-7-bankruptcy.html"},"modified":"2025-08-27T10:09:01","modified_gmt":"2025-08-27T15:09:01","slug":"chapter-13-vs-chapter-7-bankruptcy","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/bankruptcy\/chapter-13\/chapter-13-vs-chapter-7-bankruptcy.html","title":{"rendered":"Chapter 13 vs. Chapter 7 Bankruptcy"},"content":{"rendered":"\n
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Chapter 13 vs Chapter 7: Which Is Right for Me?<\/h1>\n\n
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\n By Christie Nicholson, J.D.<\/a> | Legally reviewed by Jordan Walker, J.D.<\/a>\n | Last reviewed\n
\n \n <\/i>\n Legally Reviewed\n <\/summary>\n\n
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This article has been written and reviewed for legal accuracy, clarity, and style by FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with our editorial standards<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n\n

\n \n <\/i>\n Fact-Checked\n <\/summary>\n\n
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The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n\n\n

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People choose Chapter 13 over Chapter 7 when they want to file bankruptcy and keep assets while they catch up on missed payments. Chapter 13 reorganizes debts into an affordable three to five-year payment\u00a0plan. Debtors\u00a0obtain protection from creditors during repayment. Chapter 13 can work towards a fresh start by curing mortgage arrears and managing secured and unsecured debts over time.\u00a0It’s\u00a0available to filers whose financial situation doesn’t qualify for Chapter 7 under the means test.<\/i><\/p>\n\n <\/div>\n\n\n\n

Deciding whether or not\u00a0to file for bankruptcy isn’t easy. Before filing a\u00a0bankruptcy petition<\/a>, you must decide which type of bankruptcy is right for you.\u00a0<\/p>\n

You may opt for a Chapter 7 bankruptcy if you don’t have a lot of assets and most of your debt is unsecured.\u00a0If you have a home and it’s at risk of\u00a0foreclosure<\/a>, a Chapter 13 bankruptcy may be a better choice. The debtor proposes a repayment plan that allows them to keep their home and pay creditors over time, which the bankruptcy trustee administers after court approval.<\/p>\n

This article examines and explains the differences between Chapter 7 and Chapter 13 bankruptcy. It also discusses the benefits each type offers\u00a0and how to decide which\u00a0form of bankruptcy<\/a>\u00a0will help you achieve\u00a0debt relief<\/a>.<\/p>\n

It’s not a bad idea to contact a skilled\u00a0bankruptcy attorney<\/a>\u00a0if you’re considering bankruptcy and are unsure which route to take. Their legal advice can help\u00a0guide you through the bankruptcy process.<\/p>\n

What Is the Purpose of Filing Bankruptcy?<\/h2>\n

People file for bankruptcy for different reasons. Some people want the bankruptcy court to wipe out their debt, while others are\u00a0seeking a reorganization<\/a>\u00a0of their secured and unsecured debts.<\/p>\n

If you want a fresh start and hope\u00a0the bankruptcy judge will\u00a0discharge your debts, you’ll want to file for\u00a0Chapter 7 bankruptcy<\/a>. In a Chapter 7, the trustee will sell any assets you have and use the proceeds to pay your creditors. Once they do this, the judge will discharge any remaining debts.<\/p>\n

Chapter 13 bankruptcy filers aren’t asking the court to erase their debts. Instead, they realize they’re in over their heads and want someone to step in, stop any collection activity, and create a short-term\u00a0repayment plan<\/a>.<\/p>\n

Deciding which chapter is best for you depends on several things, such as the amount of debt you owe. You’ll also need to look at the\u00a0type of debts<\/a>\u00a0you’re carrying. Armed with the right information, a\u00a0bankruptcy attorney<\/a>\u00a0can check to see if you qualify either type of bankruptcy.<\/p>\n

Differences Between Chapter 7 and Chapter 13 Bankruptcies<\/h2>\n

One\u00a0 of the\u00a0things a Chapter 7 and a\u00a0Chapter 13 bankruptcy have in common is that they protect filers from their creditors and help ease their financial stress. When you file for either chapter, the court imposes something called an\u00a0automatic stay<\/a>.\u00a0This prohibits creditors from pursuing collection action against a debtor during bankruptcy proceedings.<\/p>\n

Another thing the two types of bankruptcy share is that the\u00a0U.S. Bankruptcy Code<\/a>\u00a0governs them both. Otherwise, Chapter 7 and Chapter 13 are very different.<\/p>\n

Some of the critical differences between Chapter 13 and Chapter 7 bankruptcy include:<\/p>\n