Most people arrive at a bankruptcy consultation already knowing the two chapter numbers and nothing about which one applies to them. The short version is that Chapter 7 erases qualifying debt in a few months and Chapter 13 reorganizes it into a payment plan you finish in three to five years. Which one fits depends on your income, what you own, and whether you are trying to catch up on something or walk away from it. The Rossback Firm handles both chapters from downtown Aberdeen, and the sorting process is usually more straightforward than people expect.
What is the actual difference between the two chapters?
Chapter 7 is a liquidation case. A trustee reviews your property, sells anything not covered by an exemption, distributes the proceeds to creditors, and the court discharges the remaining qualifying debt. In the majority of consumer cases, nothing gets sold because Washington’s exemption statutes cover everything the filer owns.
Chapter 13 is a reorganization. You keep your property and commit your disposable income to a court-approved plan administered by a trustee. Secured arrears, priority taxes, and a portion of unsecured debt get paid through the plan, and the balance of qualifying unsecured debt is discharged when you finish.
Both chapters trigger the automatic stay under 11 U.S.C. section 362 the moment the petition is filed, which halts garnishments, collection calls, repossessions, and foreclosure sales while the case moves forward.
Do I qualify for Chapter 7 in Washington?
Eligibility turns on the means test, which compares your household income to the state median published by the United States Trustee Program. For cases filed on or after July 15, 2026, the Washington figures are $88,585 for one earner, $107,100 for a household of two, $131,737 for three, and $156,567 for four, with $11,100 added for each additional person.
The calculation uses your average monthly income over the six full calendar months before filing, annualized. That lookback matters. Someone who lost overtime hours in May and files in September may test differently than someone who files in June, and a recent bonus can push an otherwise eligible filer over the line temporarily.
Coming in above the median does not end the inquiry. The second half of the means test subtracts allowed living expenses based on standards published by the IRS and the Census Bureau, along with secured debt payments and court-ordered support. Plenty of above-median households still qualify for Chapter 7 after those deductions. Filers whose debts are not primarily consumer debts are outside the means test entirely, which comes up for people who ran a small business, a fishing operation, or a contracting outfit.
When does Chapter 13 make more sense?
Chapter 13 is the right tool when you need time rather than a clean break. Four situations point to it consistently.
Mortgage arrears top the list. Chapter 7 stops a foreclosure sale temporarily but does nothing about the missed payments. Chapter 13 lets you cure the entire arrearage over the life of the plan while you resume regular payments, and the lender cannot proceed as long as the plan is performing.
Nonexempt equity is the second. If you own a second vehicle, a boat, a rental parcel, or equipment worth more than Washington’s exemptions protect, a Chapter 7 trustee may sell it. Chapter 13 lets you keep the asset by paying its unprotected value through the plan instead.
Income above the means test line is the third. When the calculation shows disposable income available to creditors, Chapter 13 becomes the available path rather than a choice.
The fourth is priority debt that survives a discharge. Recent income taxes and support arrears cannot be wiped out, but a Chapter 13 plan spreads them over up to five years while interest and collection activity are held off.
Chapter 13 also offers tools Chapter 7 lacks. A second mortgage with no equity supporting it can sometimes be stripped off entirely. A vehicle loan on a car bought more than 910 days before filing can be reduced to the vehicle’s actual value rather than the loan balance. And the co-debtor stay under 11 U.S.C. section 1301 protects a relative who co-signed a consumer debt, which Chapter 7 does not do.
There is an eligibility ceiling. For cases filed between April 1, 2025 and March 31, 2028, Chapter 13 requires noncontingent, liquidated unsecured debts under $526,700 and secured debts under $1,580,125, and both limits apply to a joint case without doubling.
How long does each case take, and what does it cost?
A Chapter 7 case typically runs three to four months from filing to discharge. The meeting of creditors, often called the 341 meeting, is usually held within about a month of filing, and the discharge follows roughly sixty days after that if no one objects. Court filing fees are $338 for Chapter 7 and $313 for Chapter 13 under the federal judiciary’s fee schedule, with a waiver available in Chapter 7 for filers under 150 percent of the federal poverty guidelines.
A Chapter 13 plan lasts three years for below-median filers and five years for above-median filers. That length is a real commitment, though it comes with one practical advantage: attorney fees in Chapter 13 are largely paid through the plan rather than up front, while Chapter 7 fees are paid before the case is filed.
Both chapters require credit counseling from an approved provider within the 180 days before filing and a financial management course afterward. Cases from Grays Harbor County are filed in the United States Bankruptcy Court for the Western District of Washington, Tacoma division. On credit reporting, a Chapter 7 remains for ten years from filing and a Chapter 13 for seven.
What does neither chapter fix?
Child support and spousal maintenance survive both. So do criminal fines and restitution ordered in a criminal case, most student loan balances absent a showing of undue hardship, and taxes from recent years. Debts incurred through fraud can be challenged by a creditor in either chapter.
The timing rules also matter for anyone who has filed before. A Chapter 7 discharge is unavailable if you received one in a Chapter 7 case filed within the previous eight years under 11 U.S.C. section 727.
How The Rossback Firm approaches the decision
The analysis starts with three things: six months of income documentation, a complete property list with current values and loan balances, and every debt with its collateral identified. Those numbers answer the means test question, show whether Washington’s exemptions cover what you own, and reveal whether anything needs curing rather than discharging. Most consultations reach a clear recommendation in a single sitting, and cases sometimes convert from one chapter to the other later if circumstances change.
Choosing between Chapter 7 and Chapter 13 is less a matter of preference than of arithmetic applied to your particular income, property, and debt. The Rossback Firm works through that arithmetic with clients across Grays Harbor County and the surrounding counties, explains what each path would realistically look like, and handles the filing from start to discharge. If the debt has reached the point where you are comparing chapter numbers, scheduling a consultation is the step that turns the comparison into a decision.