What Are Most Consumer Bankruptcies Filed Under? Understanding the Most Common Chapter

Understanding Why Most Consumer Bankruptcies Are Filed Under Chapter 7

What are most consumer bankruptcies filed under is a common question among individuals exploring debt relief—and the short answer is Chapter 7, the fastest and most widely used option for personal bankruptcy in the U.S.

But why is Chapter 7 more common than Chapter 13? And when might someone file under Chapter 13 instead? In this article, we’ll explore the two main types of consumer bankruptcy, compare them, and explain why Chapter 7 remains the most popular choice for individual filers.

Understanding the Two Main Consumer Bankruptcy Types

Consumer bankruptcy is typically filed under either Chapter 7 or Chapter 13 of the federal Bankruptcy Code. While both offer debt relief, they function in very different ways.

Chapter 7 Bankruptcy:

• Often called “liquidation bankruptcy”
• Allows you to wipe out unsecured debts like credit cards, personal loans, and medical bills
• Fast process—typically resolved in 3–4 months
• May require you to give up non-exempt assets (though most filers keep everything due to exemption laws)

Chapter 13 Bankruptcy:

• Known as “reorganization bankruptcy”
• You create a 3- to 5-year repayment plan to catch up on debts
• Best for those who have steady income and want to keep assets (like a home or car)
• Typically used to stop foreclosure, pay tax debt, or restructure missed mortgage payments

Chapter 7: The Most Common Consumer Bankruptcy

So, what are most consumer bankruptcies filed under? According to the U.S. Courts and bankruptcy statistics, about 65%–70% of all non-business bankruptcies are filed under Chapter 7.

Why Chapter 7 Is More Common:

• It’s faster and typically less expensive than Chapter 13
• It eliminates most unsecured debts permanently
• There’s no repayment plan involved
• It’s ideal for people with low income, high debt, and few assets

To qualify for Chapter 7, filers must pass the means test, which compares your income to the median in your state. If your income is below the threshold, you likely qualify.

Chapter 13: A Structured Repayment Option

While fewer people file under Chapter 13, it’s still a useful option in the right situations.

Who Files Chapter 13?

• Homeowners who are behind on mortgage payments
• People with non-dischargeable debts like taxes or recent medical bills
• Those who earn too much to qualify for Chapter 7
• Individuals who want to protect valuable assets that aren’t covered by exemptions

Instead of wiping out debts instantly, Chapter 13 gives you a chance to pay back some of what you owe over time. Once your repayment period ends, the remaining qualifying debts are discharged.

But it requires commitment. Missing payments can result in case dismissal.

Why Chapter 7 Is More Popular Among Consumers

The majority of consumers file under Chapter 7 for several key reasons:

Speed and Simplicity

Chapter 7 typically lasts 90 to 120 days, compared to 3–5 years under Chapter 13. It requires fewer court appearances and less paperwork.

Cost-Effective Relief

Attorney fees and court costs are generally lower for Chapter 7. You don’t have to commit to years of payments.

Discharge of Unsecured Debts

Most credit card debt, medical bills, and personal loans are fully discharged under Chapter 7, giving filers a true fresh start.

Many Filers Qualify

If your income is low to moderate, you’ll likely pass the means test. Exemption laws also help most people keep essential property, including homes and vehicles.

Why Most Consumer Bankruptcies Are Filed Under Chapter 7

If you’re asking what are most consumer bankruptcies filed under, the answer is clear: Chapter 7. It remains the most popular choice for individuals seeking quick, affordable, and complete relief from unsecured debt. Its efficiency, cost-effectiveness, and ability to provide a fresh financial start make it the preferred route for many consumers.

Still, Chapter 13 offers critical advantages in specific situations—especially for those needing to stop foreclosure, restructure debt, or protect valuable assets. Understanding the differences and assessing your own financial situation is essential to choosing the right path forward.

Not Sure Which Bankruptcy Chapter Is Right for You? Let’s Talk

Still wondering what are most consumer bankruptcies filed under and whether Chapter 7 or Chapter 13 is the right option for you? Legal Brand Marketing connects individuals with experienced bankruptcy attorneys who can explain your options, help you qualify, and guide you through the filing process with confidence.

Contact us today and take the next step toward lasting financial relief.