Chapter 7 Bankruptcy vs Chapter 13 Bankruptcy: Which Is Worth It?
Head-to-head cost and value comparison — updated for 2026
Chapter 7 Bankruptcy
Chapter 13 Bankruptcy
Overview
Chapter 7 and Chapter 13 are the two main types of personal bankruptcy. Chapter 7 wipes out most debts quickly but may require selling some assets. Chapter 13 creates a 3-5 year repayment plan that lets you keep everything while paying back a portion of what you owe.
Chapter 7 Bankruptcy
✅ Pros
- +Eliminates most unsecured debt
- +Completed in 3-6 months
- +Fresh start quickly
- +Lower attorney fees
- +No repayment plan required
❌ Cons
- −May lose some assets
- −Income must be below state median
- −Stays on credit 10 years
- −Doesn't stop foreclosure long-term
- −Can't file again for 8 years
Chapter 13 Bankruptcy
✅ Pros
- +Keep all your assets
- +Catch up on mortgage/car payments
- +Lower total debt payments
- +Creditors can't contact you
- +More flexible qualification
❌ Cons
- −3-5 year repayment plan
- −Higher attorney fees
- −Must have regular income
- −More complex process
- −Restricted budget for years
🏆 The Verdict
Choose Chapter 7 if you have little income and few assets to protect — it's faster and cheaper. Choose Chapter 13 if you have a home or car you want to keep and enough income to make partial payments. A bankruptcy attorney can advise which is best for your situation.
Frequently Asked Questions
Which is worse for your credit?
Chapter 7 stays on your credit report for 10 years, Chapter 13 for 7 years. However, many people find their credit recovers faster after Chapter 7 because they start fresh immediately.