Quick Comparison Overview
The two most common types of consumer bankruptcy in Utah are Chapter 7 ("liquidation" or "fresh start") and Chapter 13 ("reorganization" or "wage earner's plan"). Each serves different needs and financial situations.
Understanding the key differences is the first step in determining which path can best help you regain financial control.
Chapter 7: The Fresh Start
Chapter 7 bankruptcy eliminates most unsecured debts — including credit cards, medical bills, and personal loans. The process is fast, typically completing in 3–4 months.
Key features:
- Immediately stops collection calls, wage garnishment, and foreclosure proceedings (automatic stay)
- Discharges credit card debt, medical bills, and personal loans
- Does NOT discharge student loans, alimony, child support, or most tax debts
- Must pass the means test (income below a certain threshold)
- Most filers keep their property through Utah's bankruptcy exemptions
Chapter 7 is often the best choice if you have primarily unsecured debt, your income is below the means test threshold, and you want a quick fresh start.
Chapter 13: The Reorganization Plan
Chapter 13 creates a court-approved repayment plan lasting 3–5 years. You make monthly payments based on your income, and remaining qualifying debts are discharged at the end of the plan.
Key features:
- Keeps all your property — including your home and vehicles
- Stops foreclosure and lets you catch up on missed mortgage payments
- Great for people over the Chapter 7 income limit
- Ideal if you've filed Chapter 7 within the last 8 years
- Requires regular monthly income to fund the repayment plan
"Chapter 13 can be a lifeline for homeowners facing foreclosure. It gives you time to catch up on payments while keeping your home." — Douglas L. Barrett, Esq.
Side-by-Side Comparison
| Feature | Chapter 7 | Chapter 13 |
|---|---|---|
| Timeline | 3–4 months | 3–5 years |
| Income requirement | Must pass means test | Regular income required |
| Property | May need to surrender non-exempt assets | Keep all property |
| Debt types discharged | Most unsecured debts | Unsecured debts after plan completion |
| Home foreclosure | Temporary stop (automatic stay) | Can catch up on arrears over plan |
| Repeat filing | 8 years between Chapter 7 filings | 2 years between Chapter 13 filings |
| % of Utah filings | ~63% | ~37% |
Which Is Right for You?
Chapter 7 may be best if:
- Your income is below the means test limits
- You have primarily credit card, medical, or personal loan debt
- You want the fastest possible resolution
- You don't have significant assets at risk
Chapter 13 may be best if:
- Your income is above the Chapter 7 means test limit
- You want to save your home from foreclosure
- You have a regular income and can commit to monthly payments
- You've filed Chapter 7 within the last 8 years
Next Steps
The best way to determine which chapter is right for your specific situation is to consult with an experienced bankruptcy attorney. Doug Barrett has helped thousands of Utah families navigate the bankruptcy process and can review your finances during a free, no-obligation consultation.
Schedule a FREE consultation with Doug Barrett to discuss your options. Call (801) 221-9911 or book online. Same-day appointments available.