The wrong bankruptcy chapter will not just slow you down – it can result in losing property that you did not need to lose, or paying off debts that you could have completely discharged. Choosing between Chapter 7 and Chapter 13 is the most important decision in any bankruptcy case. This is what each option actually does – and how to determine which one fits your situation.
What Chapter 7 Does (and Who It’s For)
Chapter 7 is liquidation bankruptcy. Most unsecured debts – credit card balances, medical bills, personal loans – get discharged entirely. No repayment plan. No monthly trustee payments. The process typically wraps up in three to five months from the date you file.
The trade-off is a means test. To qualify for 11 U.S.C. § 707(b), your household income must be below Ohio’s median income for your family size or you must show that allowable expenses reduce your disposable income sufficiently to pass the second stage calculation. As of April 2026, the median household income threshold in Ohio for a single person is approximately $63,564 per year. The threshold for households of four is higher, with additional amounts per person added beyond four.
Chapter 7 also involves a bankruptcy trustee who reviews your assets. Most people in Ohio keep everything they own, because Ohio’s exemption laws protect your primary home equity, a vehicle up to a set value, retirement accounts and certain personal property. Ohio requires filers to use state exemptions – federal exemptions are not available. What you can’t shield may be sold to pay creditors. For people without significant non-exempt assets, this rarely becomes an issue.
What Chapter 13 Does (and Who It’s For)
Chapter 13 works differently. You don’t discharge debts on day one. Instead, you propose a repayment plan lasting three to five years, making monthly payments to a court-appointed trustee and receiving a discharge of the remaining eligible debts at the end of the plan.
The advantages are real. Chapter 13 allows you to catch up on mortgage arrears and prevent foreclosure – something Chapter 7 can’t do. It protects non-exempt property from liquidation. Under the right circumstances, it can strip certain junior liens from a home. And there is no income ceiling for qualification.
Chapter 13 also provides some strategic flexibility for debts that would not be discharged in Chapter 7, such as certain tax obligations or domestic support obligations. The plan combines everything into one monthly payment, which your trustee will distribute to creditors according to a court-approved schedule.
A Direct Comparison
| Factor | Chapter 7 | Chapter 13 |
| Timeline | 3–5 months | 3–5 years (repayment plan) |
| Income requirement | Must pass Ohio means test | No income ceiling; must have regular income |
| Unsecured debt | Discharged entirely | Partial repayment, remainder discharged |
| Home in foreclosure | Cannot cure arrears | Can catch up over plan period |
| Non-exempt assets | May be liquidated by trustee | Protected if you fund the plan |
| Refile eligibility | Once every 8 years | Can refile as needed |
| Filing fee (2026) | $338 | $313 |
Debts Neither Chapter Eliminates
This part is important regardless of which chapter of the law you are filing under. Under 11 U.S.C. § 523, there are some debts that survive bankruptcy discharge, including:
- Child support and alimony obligations – these follow you regardless of what
- Most federal and state taxes from the last three years
- Student loans, unless you can prove undue hardship through an adversarial process (which is a high bar)
- Debts resulting from fraud or intentional wrongdoing
- Criminal fines and restitution orders
When making a decision, it’s important to consider what won’t be discharged, especially if those debts make up a significant portion of what you owe.
The Automatic Stay Applies to Both
When you file under any of the chapters, automatic stay takes effect. Creditors’ calls are stopped, wage garnishments are halted, foreclosure proceedings are frozen and lawsuits are put on hold. For many people, this immediate relief is the main reason for filing – and it applies regardless of which chapter you choose.
Not Sure Which Chapter Fits Your Situation?
The attorneys at Axelrod & Hellier LLP have been helping families in Northeast Ohio navigate these decisions since 2005. We will look at your income, assets, debts and goals and provide you with a clear answer about what course of action is best. If you want to learn more, please contact us for a free consultation.