Chapter 7 vs. Chapter 13 When Facing Foreclosure
If you’re behind on your mortgage, the two kinds of personal bankruptcy work very differently. Here is a plain-English side-by-side, plus the non-bankruptcy options worth comparing first.
Side by side
| Chapter 7 | Chapter 13 | |
|---|---|---|
| What it is | Liquidation: a trustee may sell non-exempt property to pay creditors, and many debts are discharged. | A 3- to 5-year repayment plan for people with regular income. |
| Stops a foreclosure sale? | The automatic stay pauses it, but often only briefly — there is no plan to catch up. | The automatic stay pauses it, and the plan can spread out past-due payments. |
| Catch up on missed payments? | No repayment plan for arrears. | Yes, over the life of the plan, while making regular payments. |
| Keep the house? | Possible if you are current or can get current, and your equity is protected by Colorado’s homestead exemption. | Designed to let you keep property if you make all payments. |
| Who qualifies | Income test (“means test”) if your income is above the state median. | Regular income, plus debt limits ($526,700 unsecured / $1,580,125 secured). |
| Court fees | $338 ($245 + $78 administrative + $15 trustee) | $313 ($235 + $78 administrative) |
| How long | Usually a few months. | 3 to 5 years. |
| Credit report | Generally 10 years from filing. | Generally 7 years from filing. |
Colorado’s homestead exemption
Colorado protects a set amount of equity in your home in bankruptcy: $250,000, or $350,000 if the homeowner, spouse or a dependent is 60 or older or disabled (according to Nolo; the amounts are adjusted from time to time). Equity above the exemption can matter a great deal in Chapter 7, so ask an attorney to run the numbers for your home.
Things to understand about either chapter
- A discharge wipes out your personal liability on many debts, but it does not remove the mortgage lien. If payments stop, the lender can still foreclose.
- Both require approved credit counseling within 180 days before filing.
- If you had a case dismissed in the past year, the automatic stay may last only 30 days unless the court extends it.
Compare the non-bankruptcy options first
- Cure the default before the sale — sometimes with a short-term private loan. How curing works →
- Loan modification or repayment plan with your servicer; free HUD-approved counselors can help: 1-877-601-4673.
- Sell on your terms before the sale and keep your equity — without a bankruptcy on your credit report.
Vindicator Solutions is not a law firm. We’re happy to put real numbers on the non-bankruptcy options so you can compare them with what a bankruptcy attorney tells you.
Sources
- U.S. Courts — Chapter 7 Bankruptcy Basics
- U.S. Courts — Chapter 13 Bankruptcy Basics
- U.S. Courts — Bankruptcy Court Fee Schedule
- Nolo — Colorado Bankruptcy Homestead Exemption
- Experian — When Does Bankruptcy Fall Off My Credit Report?
- U.S. Bankruptcy Court, District of Colorado — Free Legal Help
Common questions
Which bankruptcy is better for saving my house?
Chapter 13 is generally the one used to save a house when you are behind, because it lets you catch up over three to five years. Chapter 7 has no plan to repay arrears. An attorney can tell you which fits your situation.
Will Chapter 7 stop my foreclosure?
Filing triggers an automatic stay, which pauses the sale, but Chapter 7 does not provide a way to catch up missed payments, so the lender can often ask the court to let the foreclosure proceed.
How much home equity is protected in Colorado bankruptcy?
Colorado’s homestead exemption is $250,000, or $350,000 if the homeowner, spouse or dependent is 60 or older or disabled, according to Nolo. Confirm the current amount with an attorney.
Is it better to sell my house or file bankruptcy?
It depends on whether you want to keep the home and whether your income can support the payments. Selling before a foreclosure can protect your equity without a bankruptcy on your credit report; bankruptcy may make sense if you want to keep the home and can afford a plan. Compare both with real numbers.
This guide is general information, not legal, tax or financial advice. Foreclosure dates and rules can change — confirm your situation with your county Public Trustee, a HUD-approved counselor (1-877-601-4673), or a Colorado attorney.
More guides
- What a Notice of Default means in Colorado
- Colorado’s foreclosure timeline, step by step
- Missed a mortgage payment? What to do now
- Can you stop a foreclosure sale in Colorado?
- Inherited a house in Colorado?
- Chapter 13 bankruptcy and foreclosure
- Every Colorado county Public Trustee (all 64)
- Colorado & U.S. foreclosure data, 2026
- A short history of foreclosure in Colorado
- Foreclosure news: Colorado & national