What's the difference between Chapter 7 and Chapter 13 bankruptcy?

Chapter 7 erases (discharges) qualifying unsecured debt in about three to four months, with no repayment plan — it fits people with lower income and little non-exempt property. Chapter 13 reorganizes debt into a three-to-five-year repayment plan, which fits people who are behind on a mortgage or car, or whose income is too high to qualify for Chapter 7. Both are federal and work the same way whether you file in Texas or Oklahoma; the state's exemptions determine what you keep.

Chapter 7 in one line

A fast liquidation that wipes out qualifying unsecured debt in a few months. Best when income is below the state median and you want a clean slate.

Chapter 13 in one line

A 3–5 year plan that lets you catch up on a house or car and protect property. Best when you're behind on secured payments or earn too much for Chapter 7.

How to tell which

  • Behind on your mortgage? Usually Chapter 13.
  • Mostly unsecured debt, modest income? Usually Chapter 7.
  • Income above the state median? The means test may push you to Chapter 13.

Same federal law, whether you're in Dallas or Oklahoma City

Bankruptcy itself is federal — the chapters work the same for filers in Dallas, Fort Worth, Houston, Oklahoma City, Edmond, or anywhere in either state. What changes by state is the exemptions (what you keep), which we cover in the state-specific guides. See the bankruptcy timeline for the steps.

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Prior results do not guarantee a similar outcome. Every matter is different and depends on its own facts.

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Frequently asked questions

Can I choose Chapter 7 if I want to?
Only if you qualify under the means test. If your income is too high, Chapter 13 is generally the path.
Does it matter whether I file in Texas or Oklahoma?
The chapters are federal and work the same way. What differs by state is the exemptions — what property you keep — covered in the state-specific guides.

Related: Chapter 7 · Chapter 13 · Bankruptcy timeline