Chapter 7 bankruptcy is known as liquidation, while Chapter 13 is a reorganization. Both individuals and business entities can file for Chapter 7, but only individuals can file for Chapter 13. To qualify for Chapter 7, one’s disposable income needs to be low enough to pass a means test, and there are limits on the amount of debt allowed. Chapter 13, on the other hand, takes three to five years to complete. In Chapter 7, a trustee can sell nonexempt property to pay creditors, while in Chapter 13, debtors generally keep all of their property but may have to pay unsecured creditors an amount equal to the value of nonexempt assets. Additionally, Chapter 13 allows for removing unsecured junior liens from real property through lien stripping and reducing the principal loan balance on secured debts through a loan cramdown, which Chapter 7 does not allow.