Quick Answer
Chapter 7 eliminates most unsecured debt permanently in four to six months — right for people who qualify by income and want the fastest resolution. Chapter 13 restructures debt into a three-to-five year repayment plan — right for people who are behind on a mortgage, have income too high for Chapter 7, or need to repay non-dischargeable debts. An attorney review of your specific situation determines which fits best.
By John G. Merna, Esq. | Last Reviewed: June 2026 | The Merna Law Group, P.C.
The two most common forms of personal bankruptcy — Chapter 7 and Chapter 13 — serve fundamentally different purposes. Choosing the right one depends on your income, your debts, your assets, and what you are trying to accomplish. This guide explains the key differences in plain terms.
The Core Difference
Chapter 7 is a liquidation bankruptcy. It permanently eliminates most unsecured debt — credit cards, medical bills, payday loans — without requiring you to repay anything to unsecured creditors. The process concludes in four to six months. Most Virginia filers keep all of their property because exemption laws protect common assets.
Chapter 13 is a reorganization bankruptcy. You repay what you can afford over three to five years through a court-approved plan, and most remaining unsecured debt is discharged at the end. You keep all of your property throughout the plan as long as you make your payments.
Side-by-Side Comparison
| Chapter 7 | Chapter 13 | |
|---|---|---|
| Timeline | 4–6 months | 3–5 years |
| Income requirement | Must pass Means Test | Must have regular income; no ceiling |
| Unsecured debt | Permanently eliminated | Partially repaid; remainder discharged |
| Home in foreclosure | Temporary stop only | Can cure arrears and keep home |
| Vehicle cramdown | Not available | Available (reduce loan to market value) |
| Tax debt / support arrears | Cannot restructure | Repaid through plan |
| Credit report | Up to 10 years | Up to 7 years |
| Second mortgage | Cannot strip | May strip if home underwater |
When Chapter 7 Is Usually the Better Choice
- Your income is below Virginia’s median for your household size (automatic Means Test pass)
- Your debts are primarily unsecured — credit cards, medical bills, personal loans
- You are current on your mortgage and car or do not need to keep them
- You want the fastest resolution — four to six months rather than three to five years
- You do not have significant non-exempt equity in property the trustee could sell
When Chapter 13 Is Usually the Better Choice
- You are behind on your mortgage and want to keep your home — Chapter 13 is the only chapter that lets you cure mortgage arrears through a plan
- Your income is too high to qualify for Chapter 7 after the Means Test analysis
- You have non-exempt assets you want to keep that a Chapter 7 trustee might liquidate
- You have tax debt, child support arrears, or other non-dischargeable obligations you need to repay through a structured plan
- You owe more on your vehicle than it is worth and want to reduce the balance through a cramdown
- You have a second mortgage on an underwater home you want to eliminate through lien stripping
- You received a Chapter 7 discharge within the past eight years and cannot file Chapter 7 again
What If You Are Not Sure Which Chapter Fits?
Many clients come to their first consultation convinced they need one chapter and leave planning for the other. The determination involves your income, household size, the specific debts you carry, the assets you own, and what you want to accomplish. There is no substitute for an attorney reviewing your actual numbers.
A free consultation with Merna Law will tell you which chapter you qualify for, which one achieves your goals, and what the process looks like from start to finish — before you commit to anything.
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Last reviewed by John G. Merna, Esq. | June 2026 | The Merna Law Group, P.C. is a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
