Bankruptcy: Chapter 7 vs. Chapter 13
Updated November 8, 2026
Bankruptcy is a federal court process that stops collection from the day you file and either wipes out debts (Chapter 7) or sets up a plan to repay part of them (Chapter 13). Most people file under one of these two chapters.
| Chapter 7 | Chapter 13 | |
|---|---|---|
| What happens | Most unsecured debts are wiped out | You repay part of your debts through a court plan |
| Who qualifies | Income below your state's median, or passing the means test | Regular income, debts under the legal limits |
| How long | About 4 months | 3 to 5 years |
| Your property | Exempt property is kept; other property may be sold | You keep your property while you follow the plan |
| On your credit report | 10 years from filing | 7 years from filing |
| Saves a home in foreclosure | Usually not | Yes, you can catch up missed payments in the plan |
Debts bankruptcy usually doesn't wipe out
- Most recent taxes
- Child support and alimony
- Student loans, unless you show undue hardship (the federal government made this process easier in 2022)
- Debts from fraud, and court fines
Steps to file
- Take a credit counseling course from a provider approved by the U.S. Trustee Program, within 180 days before filing.
- File your petition and schedules with the bankruptcy court, usually with a bankruptcy attorney.
- Attend the meeting of creditors, which is usually short.
- Complete a debtor education course before your debts are discharged.
Before you decide
Bankruptcy is a legal decision. Many bankruptcy attorneys offer a free first consultation and can tell you which chapter fits and what you'd keep. If you can afford reduced payments, compare a debt management plan or debt settlement first.