Section 02 — Chapter Orientation
Understanding Your Options
Answer the questions below to understand which chapter of bankruptcy most resembles your situation, and whether your case has any complexity factors that suggest legal help. This is an educational exercise — it does not determine your eligibility.
Part One: Your Basic Situation
Question 1
Do you have regular income coming in right now?
Regular income means a job, self-employment earnings, Social Security, pension, rental income, or any other recurring source of money. This matters because Chapter 13 requires you to have income to fund a repayment plan. Chapter 7 does not have that requirement, though it has income limits of a different kind.
Question 2
Are you trying to keep a home or car that you are behind on payments for?
If you are behind on a mortgage or car loan and want to keep the property, Chapter 13 has specific tools that allow you to catch up on missed payments over a 3-5 year plan, all while protected by the court. Chapter 7 can temporarily pause collection actions but usually does not allow you to cure arrears and keep secured property in the long run unless you can pay the full amount quickly.
Question 3
Is most of your debt unsecured — credit cards, medical bills, personal loans?
Unsecured debt (no collateral behind it) is the cleanest type for Chapter 7, because it is generally dischargeable and does not involve the court untangling liens on property. If the majority of what you owe is unsecured, that is a favorable profile for Chapter 7. If you have significant secured debt (mortgages, car loans), the picture is more nuanced.