Chapter 7 vs. Chapter 13 Bankruptcy: Which Is Right for You?

Mon, 21 Sep 2026 11:13:47 GMT

Choosing the right type of bankruptcy can make a real difference in your financial future. When debt becomes unmanageable, two paths are most commonly available: Chapter 7, a liquidation filing, or Chapter 13, a structured repayment plan. A qualified Bankruptcy Attorney serving Lynnwood, WA, can help you determine which option fits your situation.

What Is Chapter 7 Bankruptcy?

Chapter 7 is the most common form of personal bankruptcy. It may allow eligible filers to discharge most unsecured debts, such as credit card balances and medical bills, relatively quickly. The process typically takes three to six months from filing to discharge.

How the Means Test Works

To qualify for Chapter 7, filers must pass a means test that averages income over the prior six months, annualizes it, and compares the result to the Washington State median for their household size.

If your income falls below your household's threshold, you may automatically qualify. If it exceeds that figure, additional calculations apply. A Bankruptcy Attorney can walk you through these figures accurately.

What Chapter 7 Can and Cannot Do

Chapter 7 can discharge unsecured debts quickly, but it generally cannot stop a home foreclosure long-term or eliminate secured debts tied to property you want to keep. It also cannot discharge most student loans, recent tax debts, or domestic support obligations.

What Is Chapter 13 Bankruptcy?

Chapter 13 is a court-supervised repayment plan that typically runs three to five years. It may allow you to catch up on past-due mortgage payments, keep non-exempt assets, and reorganize what you owe. A Bankruptcy Attorney can help you evaluate whether this structure suits your income and goals.

Who Benefits Most from Chapter 13

Chapter 13 is often a strong option for homeowners in Snohomish County who are behind on their mortgage and want to stop a foreclosure. Lynnwood residents facing wage garnishment may find that Chapter 13 stops the garnishment while letting them pay off past-due amounts over time. Filers whose income exceeds the Chapter 7 means-test threshold may also be directed toward Chapter 13.

Key Differences at a Glance

▸ Chapter 7 typically concludes in three to six months; Chapter 13 runs three to five years.

▸ Chapter 7 may require the sale of non-exempt assets; Chapter 13 generally allows you to keep them.

▸ Chapter 7 suits filers without stable income; Chapter 13 requires regular income to fund the repayment plan.

▸ Chapter 13 can address mortgage arrears and secured debt restructuring; Chapter 7 generally cannot.

▸ Both chapters trigger the automatic stay, which can immediately halt collection calls, wage garnishments, and most lawsuits upon filing.

The Automatic Stay: Protection Available in Both Chapters

Both Chapter 7 and Chapter 13 filings trigger the automatic stay, a federal protection that pauses most collection actions the moment your case is filed. Creditors must generally stop contacting you, and wage garnishments may halt while your case is active. For Lynnwood residents dealing with aggressive collection activity, this can provide immediate relief. A Bankruptcy Attorney can explain how the automatic stay applies to your specific creditors and obligations.

Filing in the Western District of Washington

Lynnwood falls under the jurisdiction of the U.S. Bankruptcy Court for the Western District of Washington, Seattle Division. Cases filed here follow local procedural rules in addition to the federal Bankruptcy Code. Working with a Bankruptcy Attorney familiar with Western District practices can help your case move more smoothly. The court requires detailed financial disclosures, accurate creditor schedules, and completion of approved credit counseling before filing.

Which Chapter Might Be Right for You?

The right chapter depends on your income, assets, debt types, and goals. Chapter 7 may fit better if you have limited income, few non-exempt assets, and primarily unsecured debts to eliminate quickly. Chapter 13 may serve you better if you have steady income, want to save your home from foreclosure, or did not qualify for Chapter 7. Learn more about your options on the legal services page .

Schedule a Free Consultation With Kimberly J. MacLeod, P.C.

Kimberly J. MacLeod, P.C. has served Lynnwood and Snohomish County residents with experienced, personalized bankruptcy representation for decades. When you contact this office, you work directly with attorney Kim MacLeod from your first consultation through your discharge. To explore which chapter may be right for your situation, visit the contact page or call 425-673-6300 to schedule your free initial consultation today.

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