The 30-second version
- Chapter 7 — fast wipe. Most unsecured debt erased in ~4 months. You may have to give up non-exempt property. Income-tested.
- Chapter 13 — repayment plan. 3 to 5 years of court-supervised payments. Lets you keep assets and catch up on a mortgage or car.
- Chapter 11 — reorganization. Mostly for businesses. Lets the entity keep operating while restructuring debt. Expensive and complex.
Side by side
| Chapter 7 | Chapter 13 | Chapter 11 | |
|---|---|---|---|
| What it does | Liquidates non-exempt property; discharges most unsecured debt | Court-approved 3–5 year repayment plan; remaining unsecured debt discharged at the end | Restructures debts while the business keeps operating |
| Who files | Individuals (and sometimes small businesses winding down) | Individuals with regular income | Businesses; occasionally high-asset individuals |
| Typical timeline | 3–4 months | 3–5 years | 6 months to several years |
| Income test | Yes — Means Test | No income limit, but debt limits apply | No income test |
| Keep your assets? | Only what's exempt | Yes (you pay non-exempt value into the plan) | Yes (the entity keeps operating) |
| Typical attorney fee | $1,000–$2,500 | $3,000–$5,000+ | $25,000–$100,000+ |
| Court filing fee | $338 | $313 | $1,738 |
| Stays on credit | 10 years | 7 years | 10 years |
Chapter 7 — the fast wipe
Chapter 7 is the right tool when you're overwhelmed by unsecured debt, your income is modest, and you don't have a lot of non-exempt assets to protect. The trustee looks at your paperwork, confirms there's nothing worth selling, and the court issues a discharge wiping out most of what you owe — usually within four months of filing.
Most consumer bankruptcies are Chapter 7. It's the default option, and it's the focus of BK Prepare. For a deeper walk-through, see What is Chapter 7 bankruptcy?
Good fit if: mostly unsecured debt, income at or below state median, no big property to protect, current on (or willing to surrender) any vehicles and your home.
Chapter 13 — the repayment plan
Chapter 13 is what people use when Chapter 7 isn't available or isn't the right fit — usually because their income is too high, or because they want to keep property a Chapter 7 trustee could take. Instead of a quick wipe, you commit to a 3-to-5-year repayment plan approved by the court. You make a single monthly payment to a Chapter 13 trustee, who distributes the money to your creditors according to a strict priority order.
The killer feature of Chapter 13 is that it lets you cure a mortgage default over time. If you're a few months behind on the house and the bank is threatening foreclosure, Chapter 13 freezes the foreclosure, rolls the back payments into the plan, and gives you years to catch up while staying current going forward. Chapter 7 can't do that.
Good fit if: behind on a mortgage you want to keep, have a paid-down car you'd lose in Chapter 7, income above the state median, or have non-dischargeable debt (like recent taxes) you need to spread out.
Good to know: About two-thirds of Chapter 13 plans fail before completion — usually because five years is a long time to maintain a fixed payment when life keeps happening. If you don't strictly need Chapter 13's specific protections, Chapter 7 is generally the simpler, more reliable option.
Chapter 11 — business reorganization
Chapter 11 is what airlines, retailers, and other large businesses use when they need to restructure debt without shutting down. The business keeps operating as a "debtor in possession," negotiates new terms with creditors, and emerges with a court-approved reorganization plan. Individuals can file Chapter 11, but it's usually only relevant for people whose debts exceed Chapter 13's limits or whose financial structure is unusually complex.
For typical consumers, Chapter 11 isn't on the table. The filing fees alone are ~5× a Chapter 7, and attorney costs run into the tens of thousands.
Good fit if: you're a business owner trying to keep the doors open, or an individual whose secured/unsecured debt exceeds Chapter 13's statutory caps.
Quick decision tree
Start here and follow the arrows:
- Are you a business needing to keep operating? → Chapter 11.
- Are you behind on a mortgage or car loan you want to keep? → Chapter 13.
- Is your income above the state median and you have meaningful disposable income? → Likely Chapter 13.
- Mostly unsecured debt, income at or below median, nothing big to protect? → Chapter 7.
Watch out: The decision between Chapter 7 and Chapter 13 is one of the most consequential calls in the whole process. If you're on the boundary — income near the state median, or some assets at risk — get a free consultation from a bankruptcy attorney before filing. Most offer one. BK Prepare is built to surface exactly these boundary cases via complexity flags, so you know when to seek that advice.
What BK Prepare handles
BK Prepare is built specifically for Chapter 7 — the most common consumer chapter and the most amenable to self-prep. Chapter 13 and Chapter 11 are on our long-term roadmap, but they involve ongoing court proceedings and trustee interactions that are much harder to automate well. For Chapter 13 or 11, hiring an attorney is almost always the right call.