If you've been Googling "Chapter 7 vs Chapter 13" for the last two weeks, you've already noticed: most websites talk past the question. They describe both chapters in painstaking technical detail and leave you to guess which one fits. This page does the opposite. We start with which one fits which situation, then fill in the details.
The 30-second answer
- Chapter 7 if your income is below the Idaho median (or you can pass the means test) and your debts are mostly unsecured: credit cards, medical bills, personal loans, lawsuit judgments, repossession deficiencies. You want them gone, fast.
- Chapter 13 if you're behind on a mortgage and want to keep the house, you make too much for Chapter 7, you have non-exempt assets you want to protect, or you have a tax debt or co-signed loan that Chapter 13 handles better.
That's it. Everything below explains why.
What each chapter actually does
Chapter 7 is a liquidation. The court appoints a trustee whose job is to sell any non-exempt property and distribute the proceeds to creditors. In practice, for most Idaho families, almost nothing gets liquidated, because Idaho's exemptions protect the home, the car, retirement, and household goods that real families actually own. What gets wiped out is the debt. About 90 days after filing, the court issues a discharge order: unsecured debts are gone, creditors are permanently barred from collecting.
Chapter 13 is a reorganization. Instead of liquidating, you propose a 3- to 5-year repayment plan to the court. Your trustee collects a monthly payment from you and distributes it to creditors according to the plan. At the end of the plan, the remaining unsecured balance is discharged, often pennies on the dollar.
The qualification gate: the Idaho means test
Chapter 7 has an income gate; Chapter 13 doesn't.
The Idaho means test compares your household's six-month average income to the state median for your household size. If you're below the median, you qualify for Chapter 7 automatically. If you're above, your attorney runs the long-form calculation that subtracts allowed living expenses. Most people still qualify after the math.
If you fail both forms of the means test, Chapter 7 isn't an option. Chapter 13 has no income ceiling.
What you keep
This is where most websites get vague. Here's the real answer for Idaho filers:
- Your home. Idaho's homestead exemption protects up to $175,000 of equity in your primary residence. The vast majority of Idaho homeowners are fully covered. In Chapter 7 you keep the home if you're current on the mortgage and your equity is exempt. In Chapter 13 you can keep the home even if you're behind, because the plan cures the arrears over 3 to 5 years.
- Your car. Idaho exempts a substantial amount of vehicle equity, and federal exemptions cover more. Financed and current? You keep it. Paid off but worth under the exemption? You keep it.
- Retirement accounts. 401(k), IRA, pension, and Social Security are fully protected in both chapters.
- Household goods, clothing, tools of the trade. Protected up to statutory limits that cover what normal families own.
The differences appear when there's non-exempt equity: say, $40,000 of equity in a second vehicle, or a rental property with $80,000 above the homestead cap. In Chapter 7 that asset can be sold; in Chapter 13 you keep it by paying that amount into the plan over time.
Timeline
| | Chapter 7 | Chapter 13 | |--|-----------|------------| | Time from call to filing | ~14 days typical, 48 hours if urgent | ~14–30 days | | 341 meeting of creditors | ~45 days after filing | ~45 days after filing | | Discharge | ~90 days after filing | At end of 3- to 5-year plan | | Automatic stay (calls/garnishment stop) | Day 1 | Day 1 |
What it costs
In Chapter 7, the court charges a $338 filing fee. Our attorney fee is a flat number quoted up front. Most of the attorney fee is paid before filing.
In Chapter 13, the court charges a $313 filing fee. Attorney fees in Chapter 13 are court-approved and paid through the plan rather than up front, meaning you can usually file for very little out of pocket.
See our current flat-fee pricing →
What gets discharged
Both chapters discharge:
- Credit card balances
- Medical debt (every cent)
- Personal loans, payday loans, signature loans
- Repossession deficiency balances
- Most lawsuit judgments
- Most old utility bills and gym memberships
Chapter 13 reaches a few more debts:
- Some marital-debt obligations from a divorce (not support, but property-settlement debt)
- Some older tax debt that doesn't qualify for Chapter 7 discharge
- Second mortgages on underwater homes via lien stripping
- Cure of mortgage arrears (Chapter 7 can't do this)
Neither chapter discharges:
- Recent income taxes
- Child support and alimony
- Most federal student loans
- Debts incurred through fraud
- Criminal restitution
When Chapter 13 is actually the right call
About 1 in 5 of our consultations end with us recommending Chapter 13 instead of Chapter 7. The most common reasons:
- You're behind on the mortgage. Filing Chapter 13 stops the foreclosure sale and lets you cure the arrears over the plan. Chapter 7 doesn't have that mechanism.
- You make too much for Chapter 7. The means test bars you, but Chapter 13 still discharges most of the unsecured debt at the plan's end.
- You have non-exempt assets you want to keep. A rental property, a high-value collection, equity above the homestead cap. Chapter 13 lets you keep them by paying that value into the plan.
- You've got a co-signer on a consumer debt. Chapter 13's co-debtor stay protects them; Chapter 7 doesn't.
- You filed Chapter 7 recently. There's an 8-year bar on a second Chapter 7 discharge, but Chapter 13 can still help.
When Chapter 7 is the right call
The 80% case. Below the median income, debt is mostly unsecured, no foreclosure pressure, exemptions cover what you own. Chapter 7 is faster, cheaper, and cleaner.
How we decide for you
At your free consultation, we ask three things: your last six months of income, what's been served or threatened, and what you own that has equity. From those three answers, we usually know which chapter fits before the call ends.