Reference · Chapter choice
Chapter 7 vs. Chapter 13
Most filers know within a few minutes which chapter fits. Here is the honest decision framework.
Published·In review by Eugenio Ramos, Esq. — CA Bar #261964
The 30-second version
Chapter 7 is the fast version (90–120 days from filing to discharge) for filers who do not have non-exempt assets to protect and qualify income-wise. Most consumer unsecured debt gets wiped out at the end. You keep your exempt property.
Chapter 13 is the slow version (3–5 years) for filers who have something specific to save (a house in foreclosure, a car in repossession, non-dischargeable taxes) or who do not qualify for Chapter 7 income-wise. You pay back creditors over time through a court-supervised plan.
Fresh Slate handles Chapter 7 only. If your situation calls for Chapter 13, the qualifier routes you to a free consultation with Eugenio — Chapter 13 plans require more attorney involvement than self-serve can handle.
Side-by-side
| Question | Chapter 7 | Chapter 13 |
|---|---|---|
| How long does it take? | 90–120 days | 3 or 5 years |
| Do I pay creditors back? | Usually no (any non-exempt assets are sold and proceeds distributed) | Yes — under a court-supervised plan, in monthly payments |
| Income limit? | Yes — means test (Step 1 or Step 2) | No income limit, but debt limits apply (unsecured ~$465K, secured ~$1.4M) |
| Behind on mortgage I want to keep? | Cannot catch up arrears through Chapter 7 | Yes — Chapter 13 plan catches up over 3–5 years |
| Tax debt that does not qualify for Chapter 7 discharge? | Still owed after discharge | Paid through plan over 3–5 years, no interest accrues on plan portion |
| Have non-exempt assets I want to keep? | Trustee may sell them | Keep them; pay equivalent value through plan |
| Filed bankruptcy in the last 8 years? | Cannot file Chapter 7 again (8-year wait between Ch.7 discharges) | Chapter 13 available 4 years after Ch.7 discharge, 2 years after Ch.13 |
| Cost (San Diego County, typical) | $478 with Fresh Slate / $1,500–$3,000 traditional attorney | $3,500–$6,000 attorney fees (paid through the plan over time) |
When Chapter 13 is the right answer
Chapter 13 makes sense in a handful of specific situations: behind on a mortgage you want to keep, behind on a car loan you want to keep, owing non-dischargeable taxes you need to pay over time, above the means-test median, or filed Chapter 7 within the last 8 years and need relief now. In any of these, Fresh Slate's qualifier will route you to a free consultation with Eugenio — it is exactly the kind of case where an attorney's full handling is worth the higher fee.
A Chapter 13 plan is a 3- or 5-year commitment with monthly trustee payments. The court can dismiss the case if you miss payments, which means losing the protection of the bankruptcy. It is a powerful tool when you need it, but a serious one.
Sources
- 11 U.S.C. § 707 — Chapter 7 dismissal and conversion
- 11 U.S.C. § 1322 — Chapter 13 plan content
- 11 U.S.C. § 109(e) — Chapter 13 debt limits
Related reading
Reference · Means test
The Chapter 7 means test in California
Reference · Exemptions
California Bankruptcy Exemptions
Fresh Slate is a free tool that helps you prep Chapter 7 bankruptcy in California. Eugenio Ramos reviews every filing for $100 before you file.
Check if I qualify