The choice between Chapter 7 and Chapter 13 belongs to the debtor and the attorney, but you can't draft a good petition without understanding both. As a bankruptcy petition preparer or virtual bankruptcy assistant (VBA), you will prepare petitions for each, and the forms, calculations, and documents differ. This guide explains Chapter 7 vs Chapter 13 in plain language, what changes in your work, and how to talk about it without crossing into legal advice. For the consumer-facing version, see Chapter 7 or Chapter 13 Bankruptcy? and Is It a Chapter 7, or Is It a Chapter 13?
The basic difference
| Chapter 7 | Chapter 13 | |
|---|---|---|
| Concept | “Liquidation”: a trustee may sell certain non-exempt property for creditors, and the debtor generally receives a discharge of eligible debts | “Reorganization” or repayment plan: the debtor keeps property and pays creditors through a court-approved plan |
| Length | Typically a few months | Typically three to five years |
| Who is it for? | Generally debtors who pass the means test | Debtors who want to keep property they would otherwise risk, who have regular income, or who don't qualify for Chapter 7 |
| Key income test | The Chapter 7 means test | Income determines the plan length and the minimum plan requirements |
| Payments | No plan payments; fees and costs only | Monthly plan payments to the trustee |
| Discharge | Granted fairly soon after the case is processed, if no problems arise | Granted after the plan is completed |
These are broad generalizations. Eligibility, debt limits, and many details depend on the facts and on current law, and they are the attorney's territory.
How the forms and calculations differ
- The means test. Chapter 7 uses the Chapter 7 means-test forms; Chapter 13 uses its own current-monthly-income and disposable-income forms to set the plan length and minimum payments. See 20 Chapter 7 Means Test Mistakes.
- The plan. Chapter 13 adds a repayment plan, often on a court-required local form. That is where most of the additional drafting happens. See Chapter 13 Trustee Checklist.
- Schedules I and J. In Chapter 13, the budget must support the plan payment. See Is Your Client's Budget Believable?
- Secured debts. Chapter 13 allows more options for secured debts, such as catching up on a mortgage over time. Chapter 7 relies on options like reaffirmation, redemption, or surrender. See The Importance of Reaffirmation Agreements.
- Documents and deadlines. Chapter 13 has early deadlines for the plan and for plan payments to begin.
What stays the same
Regardless of the chapter, the petition requires the same careful groundwork: a complete intake, documents to support every number, sourced values, and a thorough check for forgotten assets and debts. See How to Ask Debtors for Missing Documents and Bankruptcy Schedules A Through J Explained.
How to talk about it without giving advice
A debtor will ask, “Which one is right for me?” You can explain in general terms how the two chapters work, at the level of this article, but you can't recommend one or predict which they qualify for. A good response:
“They work differently, and which is right for you depends on your income, your property, and your goals. Your attorney will walk you through it. My job is to make sure the numbers they use to advise you are complete and accurate.”
See Unauthorized Practice of Law and the legal-advice cheat sheet for more.
Why the preparer's work informs the decision
Although you don't choose the chapter, the information you prepare drives the attorney's recommendation: the income figures, the equity in property, the mortgage arrears, and the budget. A petition prepared accurately for both scenarios lets the attorney compare options. Some attorneys ask the assistant to run the numbers both ways before the client meeting. A client who wants to keep a home with equity, for instance, raises a question the attorney needs real numbers to answer; see But My Client Wants to File a Chapter 13 Because They Have Equity in Their Home.
Switching chapters
A case can sometimes be converted from one chapter to another, or dismissed, depending on the circumstances. That is a decision for the attorney, and it often means new or amended documents. For context, see Discharged, Dismissed, and Revoked Bankruptcy.
Be ready for both chapters. The Chapter 7 & 13 Bankruptcy Petition Specialist Certification trains you on both, including the means test and the Chapter 13 plan. Prefer to specialize? See Chapter 7 Training & Certification or Chapter 13 Mastery. And a bankruptcy petition review is available for either chapter.
Frequently asked questions
Should a VBA learn both chapters?
Most firms need both, so yes. Chapter 13 skills in particular set you apart, because plan work is harder to find.
Can a debtor choose either chapter?
Not always. Eligibility depends on income, debt, and other factors the attorney evaluates.
Is Chapter 7 always faster and easier?
It is usually shorter, but whether it is better depends entirely on the debtor's situation.
This article is general education for bankruptcy professionals, not legal advice. Eligibility rules, limits, and procedures differ and change. Confirm with the supervising attorney. Questions about our courses? See the FAQ.