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

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

The Virginia Means Test

Whether you qualify for Chapter 7 in Virginia depends on the means test — a formula that compares your household income to the Virginia median for your family size. If your income is below the median, you qualify automatically. If it is above, a second calculation determines whether you have enough disposable income to fund a Chapter 13 plan instead.

Virginia median income thresholds are updated periodically by the U.S. Trustee Program. Current figures are published at justice.gov/ust/means-testing and should be checked before drawing any conclusions about your eligibility. The thresholds vary significantly by household size — a single filer faces a different number than a family of four.

Even if your income exceeds the median, it does not automatically disqualify you from Chapter 7. The second part of the means test subtracts allowed expenses — mortgage or rent, vehicle payments, insurance, taxes, child care, and other IRS-standard costs — from your income. If the resulting disposable income is low enough, you still pass. Merna Law has a strong track record of qualifying higher-income Virginia filers for Chapter 7 through careful means test analysis.

What Filing Costs in Virginia

Chapter 7 court filing fees are currently $338. Chapter 13 filing fees are $313. Attorney fees vary, but Chapter 13 representation typically costs more than Chapter 7 because the attorney manages your case through a multi-year repayment plan, attends confirmation hearings, and handles any modifications that arise.

Merna Law offers payment plans that allow most clients to begin the process without paying the full fee upfront. For Chapter 7, the court filing fee must be paid before the case is filed, but attorney fees can be structured around your budget. For Chapter 13, attorney fees are typically paid through the plan itself — meaning a significant portion comes out of your monthly plan payment rather than out of pocket before filing.

Common Decision Scenarios for Virginia Filers

Behind on mortgage, steady income: Chapter 13 is almost always the answer. It stops the foreclosure immediately and lets you cure the missed payments over three to five years while keeping your home. Chapter 7 only delays the foreclosure temporarily.

Credit card and medical debt, low income, renting: Chapter 7 is typically the fastest path. You eliminate the debt in four to six months and start rebuilding credit immediately. There is no multi-year plan to manage.

Above-median income but crushing debt: Start with a means test analysis. Many Virginia filers with above-median income still qualify for Chapter 7 after allowed deductions. If you do not qualify, Chapter 13 provides a structured path that caps what you pay unsecured creditors based on your disposable income.

Vehicle worth less than the loan balance: Chapter 13 allows a cramdown — reducing the loan balance to the vehicle’s current market value — if the loan is more than 910 days old. This can save thousands and lower your monthly payment. Chapter 7 does not offer this option.

Previously filed Chapter 7 within eight years: You cannot receive another Chapter 7 discharge, but you can file Chapter 13. This comes up more often than people expect, particularly for Virginia military families who may have filed during an earlier financial crisis and face a new one.

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.

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.