If you’re comparing Chapter 7 vs Chapter 13, you’re probably under financial pressure and trying to figure out what makes sense for your situation. Both options fall under federal bankruptcy law, but they work in very different ways. Understanding the difference between Chapter 7 and Chapter 13 can help you make a practical decision based on your income, your property, and what you’re trying to fix.
At Standley Law Office in Tampa, we work with people who are dealing with wage garnishment, collection lawsuits, repossession threats, and overwhelming debt. You do not need hype. You need clear information. Let’s walk through how each chapter works and what it means for you.
What Is Chapter 7 Bankruptcy?
Chapter 7 is often called “liquidation” bankruptcy. In plain terms, it allows you to eliminate many types of unsecured debt, such as:
- Credit card balances
- Medical bills
- Personal loans
- Old utility accounts
- Certain court judgments
If you believe Chapter 7 may be an option for your situation, speaking with a Chapter 7 bankruptcy attorney in Tampa can help you review whether you qualify based on your income and exemptions.
In a Chapter 7 case, a trustee reviews your assets. Florida law provides strong exemptions, especially for homestead property. Many people are able to protect:
- Their primary residence
- Retirement accounts
- Household goods
- A vehicle, depending on equity
Large numbers of Chapter 7 cases are “no asset” cases. That means nothing is sold because everything is protected under exemption laws.
How the Automatic Stay Works in Chapter 7
Once you file, the automatic stay goes into effect. This is a court order that stops most collection activity immediately, including:
- Wage garnishment
- Collection calls
- Bank levies
- Lawsuits
- Foreclosure actions, at least temporarily
The automatic stay gives you breathing room while the case moves forward.
The Means Test Requirement
Not everyone qualifies for Chapter 7. You must pass the means test. This test compares your household income to Florida’s median income for a similar household size.
If your income falls below the median, you usually qualify. If it is higher, the calculation looks at your expenses to see if you still qualify.
Most Chapter 7 cases last about four to six months from filing to discharge.
What Is Chapter 13 Bankruptcy?
Chapter 13 works differently. Instead of eliminating debt right away, it creates a structured repayment plan.
Under Chapter 13:
- You make monthly payments to a trustee
- The plan lasts three to five years
- Remaining qualifying debt may be discharged after you complete the plan
Chapter 13 is often used by people who:
- Are behind on mortgage payments
- Are behind on car payments
- Have regular income
- Do not qualify for Chapter 7
- Owe recent tax debt
How the Repayment Plan Is Calculated
Your monthly payment depends on:
- Your income
- Your living expenses
- The type of debt you owe
- The value of non exempt property
Some debts must be paid in full through the plan, such as certain taxes and domestic support obligations. Unsecured creditors often receive only a portion of what they are owed.
Automatic Stay in Chapter 13
Chapter 13 also triggers the automatic stay. However, Chapter 13 offers something Chapter 7 does not.
It allows you to:
- Catch up on missed mortgage payments over time
- Stop foreclosure while repaying arrears
- Prevent repossession if addressed early
For homeowners in Tampa who have steady income but fell behind, Chapter 13 can provide a structured way to get current.
The Difference Between Chapter 7 and Chapter 13
The biggest difference between Chapter 7 and Chapter 13 is how debt is handled.
- Chapter 7 eliminates qualifying unsecured debt quickly and focuses on discharge.
- Chapter 13 reorganizes debt into a repayment plan and focuses on repayment over time.
The Difference Between Chapter 7 and Chapter 13 in Timeline
Chapter 7:
- Usually finished in four to six months
- No long term payment plan
Chapter 13:
- Lasts three to five years
- Requires consistent monthly payments
If your goal is to eliminate unsecured debt as quickly as possible and you qualify, Chapter 7 is shorter. Or If your goal is to protect your home and catch up on missed payments, Chapter 13 may offer more flexibility.
The Difference Between Chapter 7 and Chapter 13 in Asset Protection
Florida has strong homestead protections. Many homeowners can keep their property in Chapter 7 if they are current on payments.
However, Chapter 7 does not give you a way to repay missed mortgage payments over time. Chapter 13 does.
Chapter 13 also allows you to protect non exempt assets by paying their value through the plan instead of losing them.
Who Usually Chooses Chapter 7?
Chapter 7 may make sense if you:
- Have mostly credit card or medical debt
- Have limited income
- Are not behind on secured loans
- Do not have significant non exempt assets
- Want faster resolution
A Chapter 13 bankruptcy attorney in Tampa can walk you through whether your income and mortgage situation make this a realistic path forward.
For example, someone who lost a job and accumulated credit card debt may benefit from Chapter 7 if they qualify.
Who Usually Chooses Chapter 13?
Chapter 13 may be a better fit if you:
- Have steady income
- Are behind on your mortgage
- Want to stop foreclosure
- Owe back taxes
- Have property that exceeds exemption limits
If you are several months behind on your mortgage but can afford payments going forward, Chapter 13 may allow you to spread out those missed payments over time.
How Chapter 7 vs Chapter 13 Affects Credit
Both Chapter 7 and Chapter 13 appear on your credit report.
- Chapter 7 can remain for up to 10 years
- Chapter 13 can remain for up to 7 years
Most people who consider bankruptcy already have late payments, collections, and charge offs. In many cases, credit can begin improving after discharge if new credit is managed carefully.
What the Filing Process Looks Like
Bankruptcy is a legal process with set steps. The good news is that most of it is paperwork, deadlines, and a few required classes. If you know what’s coming, it feels a lot more manageable.
Below is a clearer, more complete look at what usually happens in a Chapter 7 or Chapter 13 case.
Step 1: Gather income, debt, and property information
Before anything gets filed, you (and your attorney, if you hire one) need a full picture of your finances. The court expects accurate details, not estimates.
Here’s what people typically collect:
- Pay stubs or proof of income (often the last 6 months)
- Tax returns (often the last 1 to 2 years)
- Bank statements
- A list of monthly expenses (rent or mortgage, utilities, food, insurance, childcare, medical)
- A list of all debts (credit cards, medical bills, personal loans, car loans, mortgages, taxes)
- Collection letters, lawsuits, or garnishment paperwork
- Vehicle information (make, model, year, loan balance, estimated value)
- Home information (mortgage statement, estimated value, property taxes, HOA if applicable)
- Retirement and investment account statements
- Any recent large payments, transfers, or sales of property
Practical tip: pull a credit report to help you build your debt list. It does not always show every debt, but it usually catches most accounts.
Step 2: Complete the required credit counseling course
Before you can file, the law requires a credit counseling course from an approved provider. This is not the same as “debt settlement.” It’s a basic class that reviews your budget and options.
What to expect:
- It usually takes about 60 to 90 minutes
- Many people do it online or by phone
- You receive a certificate when you finish
- The certificate is required for the court filing
Common question: “Does this course replace a lawyer?”
No. It’s just a requirement to file. It does not give legal advice about your case.
Step 3: Prepare and file the bankruptcy petition
The petition is the official set of forms filed with the bankruptcy court. It includes schedules (lists) and statements that cover your income, debts, assets, expenses, recent financial activity, and other required details.
These forms typically include:
- A list of all creditors and what you owe
- A list of your property and its value
- Your monthly income and monthly expenses
- Information about recent payments, transfers, or lawsuits
- For Chapter 13, a proposed repayment plan
Once the petition is filed:
- The automatic stay usually starts right away
- Most collection activity must stop
- A trustee is assigned to your case
Step 4: The automatic stay starts (what it stops, and what it doesn’t)
The automatic stay is one of the most important protections in bankruptcy. It is a court order that generally stops collection efforts as soon as the case is filed.
It often stops:
- Collection calls and letters
- Debt collection lawsuits
- Wage garnishment
- Bank levies
- Repossession activity
- Foreclosure activity, at least temporarily
It may not stop everything. Some examples where special rules can apply:
- Certain family court matters
- Certain criminal matters
- Some actions involving repeated bankruptcy filings
- Some tax actions, depending on the situation
Common question: “How fast does the automatic stay work?”
In many cases, it starts immediately upon filing. Timing can matter, especially with a scheduled foreclosure sale or an active garnishment, so filing strategy is important.
Step 5: Attend the Meeting of Creditors (the 341 meeting)
After filing, you must attend a short hearing called the “341 meeting,” also known as the meeting of creditors. Despite the name, many cases do not involve creditors showing up. The trustee runs the meeting.
What it’s like:
- Usually held about 20 to 40 days after filing
- Often remote (by phone or video), depending on local procedures
- Typically lasts 5 to 15 minutes
- You answer questions under oath about your paperwork
The trustee usually asks things like:
- Did you review and sign your bankruptcy forms?
- Is everything true and complete to the best of your knowledge?
- Have you listed all your debts and all your assets?
- Have you transferred property recently?
- Do you expect a tax refund?
- For Chapter 13, can you afford the proposed payment?
What to bring or be ready to provide:
- A government issued photo ID
- Proof of Social Security number (or acceptable verification)
- Any trustee requested documents (often pay stubs and bank statements)
Common question: “Do I have to go to court in person?”
Sometimes yes, sometimes no. Many meetings are remote, but it depends on local rules and your specific case.
Step 6: Complete the financial management course
After filing, you must take a second required class, often called “debtor education” or a financial management course. This is separate from the pre filing credit counseling.
Key points:
- It is usually completed online or by phone
- It often takes about 60 to 90 minutes
- You receive a certificate after completion
- The court must receive that certificate, or you may not receive a discharge
Common question: “What happens if I forget this course?”
Your case can be closed without a discharge, which means you do not get the main benefit of bankruptcy. If that happens, you may have to reopen the case and pay extra fees. It is worth treating this step like a deadline.
What happens next depends on Chapter 7 vs Chapter 13
If you file Chapter 7
After the 341 meeting, the trustee finishes reviewing your case. If everything is in order, the court issues a discharge order, often within a few months.
Typical Chapter 7 timeline (varies by case):
- File the case
- 341 meeting about 3 to 6 weeks later
- Discharge often about 3 to 4 months after the 341 meeting
If you file Chapter 13
Chapter 13 includes a repayment plan, so there are extra steps after filing.
Common Chapter 13 steps include:
- Making your first plan payment soon after filing (often within 30 days)
- Attending a confirmation hearing (this is where the judge decides whether the plan is approved)
- Providing updated documents if your income or expenses change
- Staying current on ongoing obligations like mortgage and car payments, if those apply
Chapter 13 timeline basics:
- File the case
- Start plan payments
- Plan confirmation process
- Make payments for 3 to 5 years
- Receive discharge after successful completion
Why full and accurate disclosure matters
Bankruptcy forms are signed under penalty of perjury. That means you are legally stating the information is true.
Accuracy matters because:
- The trustee uses your paperwork to evaluate your case
- Missing debts can create problems later
- Missing assets can lead to serious issues, including losing protections you may have had
- Incorrect income or expense reporting can affect eligibility and payment amounts
Practical tip: if you are unsure about something, do not guess. Get the document, verify the number, and list it correctly.
Questions readers often ask about the filing process
“Do I have to list every debt, even if I want to pay it?”
Yes. Bankruptcy forms require full disclosure of debts. Wanting to pay a specific debt does not mean it can be left off the paperwork.
“What if I forgot a creditor?”
It depends on the situation and timing. In many cases, it can be corrected, but it is better to catch it before filing. Keeping a complete list from the start helps avoid delays.
“Will my employer find out?”
A bankruptcy filing is public record, but most employers do not actively check. If you have a wage garnishment, your payroll department may notice it ends. If your Chapter 13 plan involves payroll deduction (not in every case), payroll will be involved.
“Do I have to go to court?”
Many people do not appear in a courtroom for Chapter 7. The required appearance is usually the 341 meeting, and it is often remote. Chapter 13 may involve hearings handled primarily by attorneys, depending on the case and local procedures.
“How long does the paperwork take?”
That depends on how quickly you can provide documents and how complex your finances are. Having pay stubs, tax returns, and a solid debt list ready makes the process smoother.
“What should I avoid doing right before filing?”
This depends on your situation, but common issues include:
- Moving money between accounts without good records
- Paying back family or friends while other creditors go unpaid
- Using credit cards right before filing
- Selling or giving away property for less than fair value
If any of these apply, it does not always mean you cannot file. It does mean the timing and documentation matter.
Quick checklist to stay organized
If you want a simple way to stay on track, focus on these basics:
- Gather documents early (income, taxes, bank statements, debts)
- Complete the pre filing credit counseling course
- Review your petition carefully before filing
- Attend the 341 meeting and respond to trustee requests
- Complete the post filing financial management course on time
- In Chapter 13, make plan payments on schedule and keep records
Common Questions People Have
Many people assume bankruptcy means losing everything. That is not how it works in most Florida cases.
Others think having a job disqualifies them. Income alone does not prevent you from filing. The means test determines eligibility for Chapter 7, and regular income is required for Chapter 13.
Bankruptcy also does not eliminate all debt. Most student loans and certain taxes are treated differently.
If you receive benefits like SSDI or SSI, understanding what Social Security benefits cover can help you assess how those payments are treated during the bankruptcy process.
Frequently Asked Questions About Chapter 7 vs Chapter 13
What is Chapter 7 vs Chapter 13 in simple terms?
Chapter 7 eliminates qualifying unsecured debt in a shorter timeframe. Chapter 13 creates a repayment plan that lasts three to five years.
What is the difference between Chapter 7 and Chapter 13 for homeowners?
The difference between Chapter 7 and Chapter 13 is significant for homeowners. Chapter 7 may delay foreclosure but does not allow you to catch up on missed payments over time. Chapter 13 allows you to repay arrears through a structured plan.
Do I qualify for Chapter 7 vs Chapter 13 if I work full time?
You may still qualify for Chapter 7 if you pass the means test. If your income is too high for Chapter 7, Chapter 13 may be available as long as you have regular income.
How does Chapter 7 vs Chapter 13 stop wage garnishment?
Both Chapter 7 and Chapter 13 trigger the automatic stay, which stops most wage garnishments immediately after filing.
Is Chapter 7 vs Chapter 13 better for tax debt?
Chapter 13 is often helpful for recent tax debt because it allows repayment over time. Some older tax debt may qualify for discharge in Chapter 7, depending on specific rules.
How long does Chapter 7 vs Chapter 13 take?
Chapter 7 usually takes four to six months. Chapter 13 lasts three to five years before discharge.
Does Standley Law Office handle Chapter 7 vs Chapter 13 cases in Tampa?
Standley Law Office works with individuals and families in the Tampa Bay area who are comparing Chapter 7 vs Chapter 13 and want clear guidance about their options.
Making a Decision About Chapter 7 vs Chapter 13
Choosing between Chapter 7 vs Chapter 13 depends on your income, the type of debt you owe, whether you are behind on secured loans, and what property you want to keep. The difference between Chapter 7 and Chapter 13 affects your timeline, your monthly obligations, and how your assets are treated.
If you are dealing with garnishment, lawsuits, or foreclosure in the Tampa area, reviewing your financial details with an experienced bankruptcy attorney can help you understand which option fits your situation.
To learn more about Chapter 7 and Chapter 13 bankruptcy or to discuss your circumstances, contact Standley Law Office for more information.