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Every question our guides answer directly about bankruptcy, with the short answer first and the full guide one click away.
Short answer
This page collects 163 short answers drawn from 27 guides in the Bankruptcy section of Credit Defense Hub.
Each answer is the same text that appears in the FAQ section of its source guide, and links to that guide for the full context, sources, and dates. Nothing here is legal or financial advice. Browse the Bankruptcy section
163 answers from 27 guides.
The usual ladder runs from waiting (when income and assets are legally protected), to hardship programs and direct negotiation with creditors, to a nonprofit debt management plan, to for-profit debt settlement, to a consolidation loan. Each rung carries its own cost and risk. When none of them can realistically clear the debt, bankruptcy exists for that situation.
It is a legal conclusion about specific facts: a creditor can sue and win, and still collect nothing for now because every source of income and every asset is protected by law. Social Security and certain federal benefits are generally protected from commercial garnishment, wage garnishment is capped, and exemption laws shield categories of property. Judgments generally last for years, though, and can wait for circumstances to improve, so this status is worth confirming with a professional rather than assuming.
A debt management plan runs through a nonprofit credit counseling agency, repays the debt in full over roughly three to five years, and often comes with lower interest rates and a modest monthly fee. Debt settlement is a for-profit model that asks people to stop paying creditors and save into an account while the company negotiates. During that saving period accounts default, creditors can still sue, and fees take a large slice of any savings.
It can be. Forgiven debt over $600 is generally reported to the IRS on Form 1099-C, and it can count as taxable income unless an exception such as insolvency applies. Whether an exception fits is a question for a tax professional, not a sales representative.
No. Consolidation restructures debt; it does not reduce it. One payment at a lower rate can help when the total math genuinely improves, but the best rates require a strong credit profile that people in real trouble often no longer have, and a longer repayment runway can cost more overall.
The industry names are built to blur together, so the label alone is not enough. One useful marker is the U.S. Trustee Program's list of approved credit counseling agencies, which exists for bankruptcy's required counseling but doubles as a sign of legitimacy. Guarantees of specific results, pressure to cut off contact with creditors, and large fees demanded before anything is settled are the warning signs of the for-profit settlement model.
Under the Fair Credit Reporting Act, a Chapter 7 bankruptcy can be reported for up to 10 years from the filing date. A Chapter 13 is commonly removed seven years from filing under bureau practice. The clock runs from the day the case was filed, not from the discharge.
An accurate bankruptcy record cannot be deleted ahead of schedule, not by any company and not for any fee. Errors can be disputed, but accurate history ages off on the legal timeline and no other. Anyone promising early removal is selling something that does not exist.
No specific number can honestly be promised, before or after a filing. Scoring models treat bankruptcy as a serious negative event, but how far a score drops depends on where it started: a report already carrying charge-offs, collections, and lawsuits has less distance left to fall. Anyone quoting an exact figure is guessing or selling.
After a discharge, each included account generally should report a zero balance with a notation along the lines of "included in bankruptcy." Balances still showing as owed, accounts still reporting as active charge-offs, or a collector re-reporting a discharged debt as new are errors. Reports from all three bureaus are free every week at AnnualCreditReport.com, and errors get disputed in writing.
Because the math changed. A fresh Chapter 7 discharge means the old debts are gone and no new discharge is possible for years, which makes the filer a lower risk than the mailbox full of offers suggests. Some offers are legitimate rebuilding tools, while many carry steep fees and rates, so comparing them against a basic secured credit card is a common first check.
Many mortgage programs impose waiting periods after a bankruptcy discharge or dismissal, commonly measured in years and varying by loan program and by chapter. Car financing is commonly available much sooner, often at high rates that improve as the report rebuilds. These rules are lender- and program-specific and change over time, so any figure is best verified with lenders or a HUD-approved housing counselor when the time comes.
A bankruptcy discharge is a federal court order that permanently wipes out the filer's personal duty to pay qualifying debts. It works as a standing injunction: creditors are barred from calling, writing, suing, or garnishing to collect a discharged debt. It replaces the temporary automatic stay that protected the filer during the case.
In Chapter 7, the discharge is commonly entered about four to six months after filing, once an objection window of about 60 days from the 341 meeting has passed. In Chapter 13, the discharge comes only after the filer completes the three-to-five-year repayment plan, finishes the required course, and certifies that domestic support obligations are current.
Generally, no. The discharge removes the filer's personal liability, not the lender's lien on the property. Filers who keep a home or car generally keep paying for it, and foreclosure or repossession can still happen if payments stop. What happens to secured property depends on choices made during the case, such as surrender, redemption, reaffirmation, or continuing to pay.
A discharge means the case succeeded and qualifying debts are permanently wiped out. A dismissal means the case ended early without a discharge, commonly for missed paperwork, fees, courses, or plan payments. After a dismissal, every debt is still owed, interest generally kept accruing, and collection can resume once the stay ends.
Collection attempts on a discharged debt violate the discharge injunction. Filers generally document everything, pay nothing, and bring the file to a bankruptcy attorney, because the bankruptcy court can enforce its own order and remedies can include sanctions. Third-party collectors may also be violating the FDCPA, and a complaint can be filed with the CFPB in addition to getting legal help.
Generally, no. A Chapter 7 discharge protects the filer, not a co-signer on the same debt, who usually remains liable. Chapter 13 includes a limited co-debtor stay, but it lasts only while the case is open.
No. Exemption laws exist specifically so filers keep the basics, typically including some home equity, a vehicle up to a value, household goods, tools of a trade, and most retirement accounts. Most consumer Chapter 7 cases are "no-asset" cases, where the trustee sells nothing at all. Which exemptions apply is state-specific and fact-specific.
A bankruptcy is a public court record, but a practically obscure one. Consumer filings are not announced anywhere people look, and finding one generally requires searching federal court records on purpose. The people most likely to learn are those who pull your credit report with your permission, such as lenders, some landlords, and some employers.
Reporting runs on a legal clock, not forever. A Chapter 7 can generally be reported for up to 10 years from the filing date, and a Chapter 13 commonly for 7 years. The accounts that went into the case age on their own clocks, generally seven years from their original delinquency dates, so reports commonly clear in stages.
Yes. The law imposes waiting periods between discharges, generally eight years between Chapter 7 discharges, with different gaps for other chapter combinations. It is not a lifetime ban. Cases refiled quickly after a dismissal can shorten or limit the automatic stay, which is one reason a prior filing belongs in a consultation early.
No. Individuals can file alone, married or not. A spouse's separate credit is not directly tagged with the filing, though joint debts remain fully collectible from the non-filing spouse, and community-property states add wrinkles. This is a question that depends on state law and facts.
Concealing assets, debts, or transfers in a bankruptcy case is a federal crime, and it is actively looked for. Trustees examine records and transactions, filers answer under oath, and schedules are signed under penalty of perjury. Discovery can mean denial or revocation of the discharge and criminal referral.
FCRA § 605(a)(1) permits a case under title 11 to be reported for up to 10 years from the date of entry of the order for relief or the date of adjudication. For Chapter 7 the nationwide bureaus report the full 10 years, measured from the month of the initial filing rather than from the discharge date.
Because the bureaus choose to remove it then. FCRA § 605(a)(1) permits 10 years for any title 11 case, and the CFPB confirms the up-to-10-year limit covers Chapters 7, 11, 12, and 13. Experian's published guidance describes the operational practice: a Chapter 13 expires from credit reports seven years from the filing date. That is policy, not an enforceable entitlement.
Generally a zero balance, nothing past due, and a status indicating the debt was included in bankruptcy. The delinquencies that occurred before the filing stay on the account and age off on their own schedule. No new late payments should be added to a discharged account for periods after the filing date.
That is one of the most straightforward disputes in consumer credit reporting, because a discharged debt reported as currently owed is inaccurate. The bankruptcy schedules and the discharge order are the supporting documents. Both a bureau dispute under FCRA § 611 and a direct dispute to the furnisher under 12 C.F.R. § 1022.43 are available for account-level errors.
Not if it is accurate. The CFPB warns against anyone claiming to remove information that is current, accurate, and negative and calls that a probable credit repair scam. What can be corrected is a genuinely wrong entry: a case that was never filed, the wrong person's record, an incorrect chapter, or an entry still showing after its reporting window ended.
Yes. A debt reaffirmed under 11 U.S.C. § 524(c) survives the discharge, so the account keeps reporting as a live obligation with a real balance, and payment performance after the filing continues to appear. Reporting a reaffirmed account as included in bankruptcy would itself be inaccurate.
No. Regulation V at 12 C.F.R. § 1022.43(b)(1)(iv) excludes information derived from public records — judgments, bankruptcies, liens, and other legal matters — from the direct-dispute right, unless a furnisher with an account relationship supplied it. Defects in the public-record entry itself go to the credit bureaus under FCRA § 611.
At the filing. FCRA § 605(a)(1) measures from the date of entry of the order for relief, which in a voluntary case is the filing itself, and the bureaus describe both the 10-year and seven-year removal dates as running from the month of the initial filing. A Chapter 13 plan that runs five years therefore uses up most of its reporting window while the case is still open.
Neither is better in the abstract. Consolidation fits debt that can realistically be repaid at a rate you can actually get. Bankruptcy exists for debt that cannot be repaid, and it is the only one of the two that stops lawsuits and garnishment by law.
Usually, if it is repaid on time — a new loan is a hard inquiry and a new account, while bankruptcy is reported for up to 10 years (Chapter 7) or 7 years (Chapter 13). If the loan cannot be repaid, the missed payments and any later bankruptcy stack up, which is worse than either alone.
An unsecured consolidation loan is unsecured debt like any other, and bankruptcy can generally reach it. A consolidation loan secured by a home is different: bankruptcy usually does not let a person keep property when a creditor holds a lien on it, unless a Chapter 13 plan catches up the payments. That distinction is why the collateral question comes second in the test above.
No. IRS Topic 431 lists debt canceled in a Title 11 bankruptcy case as an exclusion from income. Debt forgiven outside bankruptcy — through settlement, for example — is generally taxable unless another exclusion such as insolvency applies.
It consolidates payments, not debt. A nonprofit counselor collects one payment and distributes it to creditors, who often lower interest. No new loan is created and the full balance is repaid. See alternatives to bankruptcy.
Bankruptcy has a $338 (Chapter 7) or $313 (Chapter 13) court filing fee, plus attorney fees and a required counseling course. A consolidation loan costs interest plus any origination fees or points over its full term. Which is cheaper depends entirely on the balance, the rate offered, and whether the loan would actually be repaid.
Often, yes. A paid-off car stays if its value fits inside the applicable exemption. A financed car stays if the equity is exempt and the filer reaffirms the loan, redeems the car for its value, or keeps paying with the lender's cooperation. The filer must declare the choice on the statement of intention within 30 days of filing.
The federal motor vehicle exemption in 11 U.S.C. §522(d)(2) is $5,025 for cases filed from April 1, 2025 through March 31, 2028. The federal wildcard in §522(d)(5) can add $1,675 plus up to $15,800 of unused homestead exemption. Most states require their own exemption list instead, and the state figure can be higher or lower.
Reaffirming means signing a new agreement to stay personally liable on the existing loan, so the lender keeps the lien and the filer keeps paying. Redeeming under §722 means paying the lender the car's current value in one lump sum, after which the lien is released. Redemption helps when the loan is far larger than the car is worth; reaffirmation helps when the balance and payment are reasonable.
The statement of intention is due within 30 days after filing or before the 341 meeting, whichever is earlier, under §521(a)(2)(A). The filer then has 45 days after the first date set for the 341 meeting to sign the reaffirmation or redeem the car under §521(a)(6). Missing that deadline ends the automatic stay on the car under §362(h).
It can if no reaffirmation was signed and the deadline passed, because §521(d) lets the contract's bankruptcy-default clause operate and the discharge removed the lender's right to sue for a deficiency. Whether a particular lender actually does so varies. Some accept payments indefinitely; others repossess a current loan. The only way to lock in the right to keep the car is a reaffirmation or a redemption.
The trustee may, if the non-exempt equity is large enough to produce money for creditors after the lender is paid and the filer receives the exempt amount. When the surplus is small, trustees often abandon the car under §554 because selling it would cost more than it returns. There is no fixed threshold; it depends on the trustee and the district.
Chapter 13 is a court-supervised repayment plan, not a liquidation. Debts are reorganized into one court-approved plan lasting three to five years; the filer makes monthly payments to a trustee, who pays the creditors. Property is generally kept while the plan runs, and at successful completion most remaining qualifying unsecured debt is discharged. The filing fee is $313.
Chapter 13 generally fits people with regular income who do not pass the Chapter 7 means test, who are behind on a mortgage or car and want to catch up over time, who have non-exempt property they would lose in Chapter 7, or who have obligations like certain taxes that a structured plan handles well. In practice the single most common reason is foreclosure. Eligibility also includes statutory debt limits that adjust periodically.
Three to five years. Plan payments generally begin within 30 days of filing, even before the court confirms the plan. The discharge comes after all plan payments are made and a financial management course is completed.
The automatic stay halts the foreclosure process the moment the case is filed. A Chapter 13 plan can then spread the mortgage arrears over the life of the plan while regular payments resume, which is something Chapter 7 does not offer. The protection lasts only as long as the case does; if the case is dismissed, the stay ends.
The automatic stay ends and creditors, including a foreclosing mortgage servicer, can resume where they left off. Repeat filings can shorten or limit the stay. When a plan payment stops being possible, modification, a hardship discharge, or conversion to Chapter 7 may be available, which is why many filers contact their attorney right away rather than after missed payments pile up.
A Chapter 13 bankruptcy commonly remains on credit reports for up to seven years from filing, versus ten years for Chapter 7. During the plan, new credit generally requires trustee or court approval. Checking that included debts report correctly after discharge matters just as much here as in any other bankruptcy.
Chapter 7 is the "liquidation" chapter of consumer bankruptcy. A court-appointed trustee reviews the filer's assets, anything not protected by exemptions can be sold to pay creditors, and qualifying debts are then discharged. Most consumer cases are "no-asset" cases where nothing is sold.
A typical no-asset consumer case commonly runs about four to six months from filing to discharge. The 341 meeting of creditors happens roughly three to six weeks after filing, and a financial management course must be completed before the discharge is entered.
Chapter 7 is generally used by people whose income is at or below their state's median, or who pass the means test's disposable-income calculation, and whose debts are mostly unsecured. Higher-income filers are generally directed toward Chapter 13's repayment structure. The figures adjust regularly, so the U.S. Trustee Program's means-testing page is the source for current numbers.
Discharge generally does not wipe out most student loans (unless a separate hardship case is shown), most recent taxes, child or spousal support, court fines and restitution, or debts from fraud. For secured debts like a car loan or mortgage, discharge removes personal liability but the lender's lien generally survives.
The court filing fee is $338. It can be paid in installments using Form 103A, or waived using Form 103B for filers with income under 150% of the federal poverty guidelines. Required counseling courses are low-cost, and attorney fees vary by market.
A Chapter 7 bankruptcy can appear on credit reports for up to 10 years from the filing date. For many filers whose reports already show charge-offs, collections, and lawsuits, the discharge marks the point where rebuilding can begin, including checking that discharged debts report correctly.
Chapter 7 is faster and cheaper: about four to six months, a $338 court fee, and qualifying debts discharged without a repayment plan. Chapter 13 is a three-to-five-year repayment plan with a $313 court fee that generally keeps property and can catch up a mortgage. Most other differences follow from that core trade.
The means test sorts filers. Household income at or below the state median generally allows Chapter 7. Above the median, a standardized disposable-income calculation applies, and enough money left over each month points toward Chapter 13, where that capacity funds the plan. The medians and allowances change on a schedule, so current figures matter.
Often, yes, but it depends on state exemptions. In Chapter 7 the trustee can sell non-exempt property, although most consumer cases are no-asset cases where nothing is sold. A house that is safe under one state's exemptions can be at risk under another's, which is why the question generally needs an attorney's review of the actual numbers.
Chapter 13 is the classic foreclosure tool. Mortgage or car-loan arrears can be spread across the plan while regular payments resume. Chapter 7 has no mechanism to catch up arrears over time.
A Chapter 7 case can be reported for up to 10 years from filing. A Chapter 13 case is commonly reported for up to 7 years from filing. That difference is generally not the deciding factor on its own, since Chapter 13 also involves years of plan payments and a real risk of not completing the plan.
Generally, no. Neither chapter discharges most student loans, domestic support obligations, or most recent taxes. Straightforward unsecured debt such as credit cards, medical bills, and personal loans is what both chapters are built to address.
Bankruptcy generally does not erase child support or alimony, most student loans, most recent income taxes, or criminal fines and restitution. Debts for injury caused by intoxicated driving generally survive too, and debts obtained by fraud can survive if the creditor objects in time and the court agrees. Secured liens, such as a mortgage or car lien, also generally ride through the case.
Student loans generally survive bankruptcy. The only way around this is a separate lawsuit inside the bankruptcy case, called an adversary proceeding, that shows repayment would be an undue hardship. That standard is demanding, but courts do grant full and partial hardship discharges, and the process for evaluating hardship claims on federal loans has become more structured in recent years.
Most recent income taxes survive bankruptcy. Older income taxes can sometimes be discharged, but that depends on technical timing rules about when the return was due, when it was actually filed, when the tax was assessed, and whether fraud was involved. Tax liens and non-income taxes follow different rules again, so filers with meaningful tax debt generally want an attorney who works that line.
No. Domestic support obligations, meaning child support and alimony, are never discharged in any consumer chapter, and they sit near the front of the payment line. In Chapter 13, the plan generally must bring support arrears current by the end of the plan, and staying current on ongoing support is generally a condition of finishing at all.
Debts not listed in the schedules, the official list of debts filed with the court, are generally not discharged. Some courts treat this differently in no-asset cases, but that nuance is not something to plan around. Complete, accurate schedules, including awkward entries like debts to family, are the only safe practice, since schedules are signed under penalty of perjury.
Credit card balances, medical bills, personal loans, old utility and phone bills, and many deficiency balances after a repossession are generally dischargeable. In most consumer cases that adds up to most of the debt. The Chapter 13 discharge is also modestly broader than the Chapter 7 discharge in a few categories.
There is no fixed dollar limit. Step one of the means test compares household income for the six months before filing, annualized, to the median family income for the filer's state and household size, published by the U.S. Trustee Program and updated on a schedule. At or below the median, Chapter 7 is generally available; above it, a second calculation of disposable income decides.
Often, yes. Above-median filers complete Official Form 122A-2, which subtracts IRS-standard living allowances and certain actual expenses such as taxes, health insurance, and secured debt payments. A presumption of abuse arises only if the remaining disposable income over 60 months exceeds the thresholds in 11 U.S.C. §707(b)(2), and even then it can be rebutted with special circumstances.
As "current monthly income": the average of gross income from nearly all sources over the six full calendar months before the filing month, including wages, business income, rental income, and regular contributions from others to household expenses. Social Security benefits are excluded, and the HAVEN Act excludes certain veterans' disability benefits.
A Chapter 7 discharge is barred if a prior Chapter 7 discharge came from a case filed within the past eight years, or a prior Chapter 13 discharge from a case filed within the past six years unless that plan paid creditors in full or at least 70 percent in good faith. A case dismissed in the last 180 days for disobeying court orders, or dropped after a creditor sought stay relief, also blocks refiling.
Yes. A briefing from a U.S. Trustee-approved provider within the 180 days before filing is required for every individual filer under 11 U.S.C. §109(h). It can be done online or by phone, and a certificate is filed with the petition. There is a brief deferral for genuine emergencies, but not a waiver.
No. Chapter 7 allows a trustee to sell property that is not exempt under the applicable state or federal exemptions, and it has no mechanism to catch up on a mortgage or car loan. Someone who qualifies but has non-exempt equity or arrears on property they want to keep may be better served by Chapter 13, or by a non-bankruptcy option.
The same day, when an attorney files a skeleton petition electronically. The petition, the creditor list, and a handful of required statements are enough to open the case and trigger the automatic stay; the remaining schedules are due within 14 days under Rule 1007(c). A person filing without a lawyer generally files on paper at the clerk's office during business hours.
Generally yes, for dischargeable debts. The stay takes effect when the petition is filed, and the employer must stop withholding once notified of the case. Garnishment for current child or spousal support is not stopped, and a repeat filer with a case dismissed in the past year may have a stay that expires after 30 days.
If the petition is filed before the sale is completed under state law, the stay stops it. A Chapter 13 then lets the missed payments be cured over the plan while regular payments resume. If the sale already happened, the U.S. Courts' Chapter 13 overview and 11 U.S.C. §1322(c) make clear the home generally cannot be recovered through bankruptcy.
A bare-minimum filing: the petition form, the list of creditors, and the few statements the court requires at the outset, filed to start the case and the stay immediately. Everything else, including the schedules of assets, debts, income, and expenses, must follow within 14 days or the case can be dismissed.
Only if the landlord has not yet obtained a judgment for possession. Under §362(b)(22), an eviction where a judgment for possession already exists generally continues, with a narrow exception if state law would allow the tenant to cure the default and the tenant makes the required certification and deposit with the court.
The stay in the new case is limited. One dismissed case in the previous year means the stay ends 30 days after filing unless the court extends it on a timely motion; two or more means no stay takes effect unless the court imposes one. This is the situation where filing without a lawyer most often goes wrong.
Exempt property is protected by a state or federal exemption statute, up to a dollar limit per category, and stays with the filer. Non-exempt property is anything with value above those limits or outside the listed categories. In Chapter 7 the trustee can sell non-exempt property for creditors; in Chapter 13 the filer keeps it but must pay at least its value to unsecured creditors through the plan.
For cases filed April 1, 2025 through March 31, 2028: homestead $31,575; vehicle $5,025; household goods $800 per item and $16,850 total; jewelry $2,125; wildcard $1,675 plus up to $15,800 of unused homestead; tools of the trade $3,175; life insurance cash value $16,850; personal injury $31,575. Retirement accounts are exempt, with IRAs capped at $1,711,975. The figures come from the Judicial Conference notice at 90 FR 8941.
The federal wildcard in 11 U.S.C. §522(d)(5) lets a filer protect $1,675 of any property, plus up to $15,800 of the homestead exemption they did not use. A renter using the federal list therefore has up to $17,475 to apply to cash, a tax refund, a second vehicle, or anything else. Many opt-out states have their own wildcard, often smaller, and some have none.
As of 2025: Alaska, Arkansas, Connecticut, Hawaii, Kentucky, Massachusetts, Michigan, Minnesota, New Hampshire, New Jersey, New Mexico, New York, Oregon, Pennsylvania, Rhode Island, Texas, Vermont, Washington, and Wisconsin, plus the District of Columbia. Every other state has opted out under §522(b)(2), and its residents must use the state list. The filer picks one list in full; the two cannot be combined.
In consumer cases, the assets that most often produce money are pre-filing tax refunds and bank balances on the filing date. Next come a second vehicle or recreational equipment with equity above the exemption, non-exempt home equity, and claims or inheritances owed to the filer. Used furniture, clothing, and a single modest car are rarely sold because their resale value is too low. Most individual Chapter 7 cases end with a no-asset report.
No. Chapter 13 filers keep all their property. Under §1325(a)(4), though, the plan must pay unsecured creditors at least what they would have received if the non-exempt property had been sold in Chapter 7. Non-exempt value therefore sets a floor on the plan payment rather than causing a sale.
Yes. Individuals can represent themselves in bankruptcy court, which is called filing pro se; corporations and partnerships cannot. The federal courts publish pro se instructions and every official form at no charge, while cautioning that bankruptcy has long-term consequences and that hiring a competent attorney is strongly recommended.
Court data consistently shows pro se Chapter 13 cases overwhelmingly ending in dismissal without discharge. Chapter 13 requires drafting a plan a judge will confirm, calculating disposable income under technical rules, and keeping the case alive for three to five years. Attorney fees in Chapter 13 can commonly be paid through the plan itself, which changes the affordability math.
Self-filing gets discussed as realistic mainly when income is below the state median, nothing owned appears likely to exceed typical exemptions, there are no recent transfers or large repayments to family or particular creditors, no business debts, co-signers, or recent luxury purchases, and income is documentable with tax returns filed. Even one miss on that list moves a case out of simple territory.
The court filing fee is $338 for Chapter 7 and $313 for Chapter 13, and the official forms are free. Chapter 7 filers with income under 150% of the federal poverty guidelines can apply for a fee waiver (Form 103B) or pay in installments (Form 103A). The Chapter 13 fee cannot be waived. A pre-filing credit counseling course from a U.S. Trustee-approved agency is also required.
No. Under 11 U.S.C. §110, a non-attorney preparer may transcribe the information provided onto official forms for a fee, but may not advise on which chapter to file, which exemptions to claim, whether to file at all, or what any question on the schedules means. Paying a preparer adds typing, not protection, and every legal judgment in the case remains the filer's alone.
Filers generally exhaust cheaper options first: legal aid offices for income-qualified households, pro bono programs, free consultations from consumer bankruptcy attorneys, and law school clinics in some areas. A free consultation costs nothing and can surface complications that are hard to see from inside the case.
The court fee is $338 as of September 2026, made up of a $245 filing fee, a $78 administrative fee, and a $15 trustee surcharge. Add roughly $0 to $50 per course for the two required counseling courses and, if a lawyer is hired, a flat attorney fee that published estimates place between about $1,000 and $3,000 depending on location and complexity.
The court fee is $313, a $235 filing fee plus a $78 administrative fee. Attorney fees are higher than Chapter 7, with published estimates of about $2,500 to $5,000, but most districts set a "no-look" flat fee that is paid largely through the repayment plan rather than up front.
Only in Chapter 7. Under 28 U.S.C. §1930(f), the court may waive the fee for an individual whose income is below 150 percent of the federal poverty line for their household size and who cannot pay it in installments. Chapter 13 filers can pay in installments but cannot get a waiver.
Yes, with the court's permission, in either chapter. Rule 1006(b) allows up to four installments, with the last due within 120 days of filing; the court can extend that to 180 days for cause. Failing to pay an installment can lead to dismissal.
Because filing triggers the automatic stay, which stops collection of every debt that existed before the petition, including an unpaid attorney fee. A lawyer who files first generally cannot collect the balance afterward, so Chapter 7 fees are almost always paid in full up front.
One found through a channel that verifies a license and caps the first consultation: a state bar referral service, the NACBA directory, LSC legal aid if income-eligible, or a law school clinic. The lowest number in an ad is not a proxy for affordability; a written quote that lists what is included is.
There is no limit on the number of filings. The Bankruptcy Code limits how often a person can receive a discharge. The waits are 8 years between Chapter 7 discharges, 2 years between Chapter 13 discharges, 4 years from a Chapter 7 to a Chapter 13, and 6 years from a Chapter 13 to a Chapter 7, with exceptions. Each period runs from the filing date of the earlier case.
Eight years, measured from the date the first Chapter 7 was filed to the date the new one is filed, under 11 U.S.C. §727(a)(8). A person who filed on June 1, 2018 can file a new Chapter 7 and receive a discharge on or after June 1, 2026, regardless of when the first discharge was actually entered.
Yes. A Chapter 13 discharge is available if the new case is filed at least four years after the Chapter 7 was filed, under §1328(f)(1). A Chapter 13 can be filed sooner than that to use the plan and the automatic stay, for example to catch up a mortgage. It will not end in a discharge. Practitioners call that a Chapter 20.
Yes, if at least six years have passed since the Chapter 13 was filed, under §727(a)(9). The six-year bar does not apply if the Chapter 13 plan paid unsecured creditors 100 percent, or paid at least 70 percent under a plan proposed in good faith that was the filer's best effort. A Chapter 13 that was dismissed rather than discharged triggers no waiting period at all.
If one case was dismissed in the year before the new filing, the stay ends 30 days after the new case is filed under §362(c)(3). The court can extend it on a good-faith showing made before the deadline. If two or more cases were dismissed in that year, no stay arises at all under §362(c)(4) unless a party asks the court to impose one within 30 days.
A dismissal does not start any discharge waiting period. It can still matter. A dismissal in the prior year limits or eliminates the automatic stay in the next case. A dismissal for willful failure to follow court orders, or a voluntary dismissal after a stay-relief motion, bars any new filing for 180 days under §109(g).
Credit counseling from an approved provider within 180 days before filing; completing the free official forms; filing them with the bankruptcy court for your district and paying the fee or applying for installments or a waiver; attending the 341 meeting of creditors 21 to 40 days later; completing a debtor education course; and receiving the discharge, which in Chapter 7 typically comes 60 to 90 days after the 341 meeting.
Preparation can be done online, and some districts offer an electronic self-representation tool for Chapter 7 filers, but the case is filed in a federal bankruptcy court, not on a website. Attorneys file through CM/ECF; most pro se filers file paper at the clerk's office or by mail. The nonprofit Upsolve prepares Chapter 7 forms free for eligible users, who then file them themselves.
Preparing a Chapter 7 case usually takes a few weeks of gathering documents. After filing, the 341 meeting is 21 to 40 days out and the discharge typically follows 60 to 90 days after that, so roughly four to six months in total. Chapter 13 takes three to five years because the discharge comes after the plan is paid.
The court fee is $338 for Chapter 7 and $313 for Chapter 13 under the federal fee schedule in force since December 1, 2023. Add roughly $0 to $50 per course for the two required counseling courses, and an attorney fee if a lawyer is hired. Installments and, in Chapter 7, a full fee waiver are available to those who qualify. See the full cost breakdown for published attorney-fee estimates.
Usually the only required appearance is the 341 meeting of creditors, which is run by the trustee, not a judge, and is often held by phone or video. Chapter 13 filers may also have a confirmation hearing. A judge becomes involved only if a creditor objects or a motion is filed.
Honest errors can be fixed by filing amended schedules, for which the court charges a small fee. Omissions that look intentional, such as an undisclosed asset or transfer, can lead to a denied discharge or, in serious cases, a referral for bankruptcy fraud. When in doubt, disclose and explain.
It is a voluntary contract made during a Chapter 7 case. In it, the filer agrees to stay personally liable on a debt, usually a car loan, that the discharge would otherwise erase. Under 11 U.S.C. §524(c) it must be signed before discharge, filed with the court, and accompanied by the required disclosures. It must also be certified by the filer's attorney or approved by the judge after a hearing.
Not always, but without a reaffirmation or a redemption the lender gains the right to act. Once the 45-day period in §521(a)(6) passes, §362(h) ends the stay on the car and the contract's bankruptcy-default clause can operate. Some lenders accept continued payments; others repossess. A reaffirmation or a §722 redemption is the only way to lock in the right to keep it.
Yes. Under §524(c)(4), the filer may rescind by giving the creditor written notice. The deadline is the discharge date or 60 days after the agreement is filed with the court, whichever is later. No court approval is needed. Once rescinded, the debt is treated as discharged and the filer has no personal liability.
Section 524(m) looks at the statement filed with the agreement. If monthly income minus monthly expenses is less than the reaffirmed payment, the law presumes the agreement is an undue hardship. The filer may rebut it in writing by explaining where the money will come from; otherwise the court may disapprove the agreement after a hearing. The presumption does not apply when the creditor is a credit union.
Most consumer bankruptcy attorneys advise against it. The mortgage lien survives the discharge regardless, so the filer can keep the house by continuing to pay without any agreement. Reaffirming restores personal liability on the entire note, which matters if the house is later lost to foreclosure for less than the balance. The main thing a reaffirmation buys is continued credit reporting of the payments.
Under Bankruptcy Rule 4008(a), the agreement must be filed within 60 days after the first date set for the 341 meeting of creditors, with an Official Form 427 cover sheet. The court may extend that time. Separately, §524(c)(1) requires the agreement to be made before the discharge is entered; an agreement signed after discharge is unenforceable.
As of September 4, 2026, the limit in 11 U.S.C. §101(51D), which §1182(1) incorporates, is $3,424,000 in total non-contingent liquidated debt, adjusted effective April 1, 2025. The temporary $7.5 million limit expired June 21, 2024. S. 3977, which would permanently restore $7.5 million, passed the Senate on August 3, 2026 and was pending in the House as of the latest source found. The Congress.gov bill page shows the current status.
Yes. Section 101(51D) applies to a "person engaged in commercial or business activities." An individual qualifies if total debt is within the limit and at least 50 percent of it arose from the business. A sole proprietor with a large home mortgage may fail the 50 percent test because the mortgage is consumer debt. That is a common reason individuals end up in Chapter 13 or a personal Chapter 7 instead.
Subchapter V removes the creditors' committee and disclosure statement by default (§1181). It gives the debtor the exclusive right to file a plan within 90 days (§1189). It allows confirmation without any accepting class if the plan commits projected disposable income for three to five years (§1191). And it does not apply the absolute priority rule, so the owner keeps the business. A Subchapter V trustee monitors the case but does not operate the business.
Often there is little benefit. Under §727(a)(1), only individuals receive a Chapter 7 discharge, so an LLC or corporation in Chapter 7 is liquidated but not discharged. The debts that follow the owner are the personally guaranteed ones, and those are addressed in the owner's own Chapter 7 or Chapter 13. An entity Chapter 7 mainly provides an orderly wind-down by a trustee.
Not by the business's case. A guarantee is the owner's personal debt, and only a case filed by the owner can discharge it. In a personal Chapter 7, guarantees on SBA loans, merchant cash advances, leases, and business credit cards are generally unsecured debt. They are discharged unless fraud is proven. Trust-fund tax liabilities are the major exception; they survive every chapter.
The plan is due within 90 days of filing under §1189, and approval hearings typically follow within a few months. Payments under a contested plan run three years under §1191(c), or up to five if the court sets a longer period. The discharge is entered when those payments are complete under §1192. In an agreed plan the discharge comes when the plan is approved, and the payments continue after that.
The Brunner test, used by most federal circuits, requires a borrower to show three things. First, paying the loan would prevent a minimal standard of living. Second, that situation is likely to persist for a significant part of the repayment period. Third, the borrower has made good-faith efforts to repay. The Eighth Circuit uses a totality-of-the-circumstances test instead.
It is a standardized form, published by the Department of Justice and updated in May 2025, that a borrower completes after filing the adversary proceeding on a federal loan. It collects income, expenses measured against IRS standards, loan history, and hardship facts. The government attorney uses it to decide whether to recommend full or partial discharge under the November 2022 guidance.
The only official figures come from a November 2023 DOJ release covering the first ten months of the new process: 632 cases filed, and full or partial discharge granted in 99 percent of the cases decided by then. Those numbers reflect a small, self-selected group of borrowers who filed. No later official update could be verified, and the guidance is a policy that can change.
Only if they are "qualified education loans" under Internal Revenue Code §221(d)(1). Loans that meet that definition are protected by §523(a)(8) and require a hardship finding. Private loans that fall outside it, such as some loans for unaccredited programs or amounts above the cost of attendance, have been treated by several courts as ordinary dischargeable debt. The DOJ guidance does not apply to private loans.
Chapter 13 does not discharge them, but it stops collection for the three-to-five-year plan and lets the borrower pay them through the plan alongside other unsecured debts, often at a reduced monthly amount. Interest usually continues to accrue. A borrower may also bring the undue-hardship adversary proceeding during a Chapter 13 case.
Yes, for income tax that meets three timing tests: the return was due more than three years before filing, was filed more than two years before filing, and the tax was assessed more than 240 days before filing, with no fraud or evasion. Tax that fails any test is a priority claim that survives Chapter 7 and must be paid in full in Chapter 13.
Under 11 U.S.C. §507(a)(8)(A)(i), income tax keeps priority status, and stays non-dischargeable, if the return for that year was last due, including extensions, within three years before the bankruptcy petition. Once the due date is more than three years old, that test is passed. An extension to October pushes the date by six months.
Under §507(a)(8)(A)(ii), tax assessed within 240 days before the petition keeps priority status. The clock excludes any period an offer in compromise was pending, plus 30 days, and any period a prior bankruptcy stay was in effect, plus 90 days. Audit assessments restart the 240 days for the additional amount.
No. A Notice of Federal Tax Lien filed before the petition survives the discharge and remains attached to property the filer owned at filing, according to IRS Publication 908. The discharge ends personal liability and stops levies and garnishment for the discharged tax, but the lien can be enforced against the property. In Chapter 13, the lien is paid as a secured claim through the plan.
No. Taxes required to be collected or withheld, such as employee withholding, the employee share of FICA, and collected sales tax, are excluded under §507(a)(8)(C) and §523(a)(1)(A) from every discharge, including the Chapter 13 discharge. That includes a trust fund recovery penalty assessed against a business owner personally.
Priority tax that fails the timing tests must be paid in full through the plan, generally over three to five years, and interest usually stops accruing on the unsecured priority portion. Tax that passes the tests is paid alongside other unsecured debt, often at a small percentage, and the balance is discharged when the plan is completed. Trust-fund and fraud taxes are still excluded.
The 341 meeting, named for section 341 of the Bankruptcy Code, is a short mandatory meeting held roughly three to six weeks after a bankruptcy case is filed. A trustee, not a judge, verifies the filer's identity, swears them in, and asks standard questions about the petition, assets, income, and debts. In most consumer cases it is a routine administrative step.
In the vast majority of consumer cases the meeting itself lasts about five to fifteen minutes. Meetings are scheduled in blocks, so filers often hear several other cases before their own. Since the early 2020s many districts hold them by phone or video, and the notice states the format, time, and connection details.
Almost never in ordinary consumer cases. The meeting gives creditors a forum to ask questions if they choose, but in practice they rarely attend. The trustee runs the meeting and asks the questions.
Standard ones: whether the filer read and signed the petition, whether everything is accurate and complete, whether all assets and debts were listed, whether they have filed bankruptcy before, whether they recently paid any creditor or transferred property, and whether they expect an inheritance, lawsuit recovery, or tax refund. Honest, direct answers, including "I need to correct something," are exactly what the meeting is for.
Government photo ID and proof of a Social Security number are checked in nearly every case; a driver's license plus the original Social Security card is the classic pairing. Without them the meeting usually gets continued to another date. Trustees also typically request recent tax returns, pay stubs, and bank statements before the meeting, with a deadline.
The meeting is mandatory. Missing it without arranging a continuance can lead to dismissal of the case, which ends the automatic stay and can complicate refiling. If a genuine conflict exists, the time to contact the trustee's office, through an attorney if one is involved, is before the date, not after.
The stay takes effect the moment the bankruptcy petition is filed. There is no hearing and no judge's signature needed. The court notifies creditors shortly after filing, and sharing the case number with a collector or payroll department generally stops collection even sooner.
Generally, yes. A garnishment for consumer debt is one of the collection actions the stay halts, along with bank levies, repossessions, and foreclosure sales. The garnishing creditor's remedy becomes a motion in the bankruptcy case rather than the filer's paycheck.
Criminal cases and most criminal fines continue, and so do most domestic support actions such as child support and alimony collection. Certain tax activities, like audits and demands to file returns, are also exceptions. Secured creditors can ask the court to lift the stay, commonly to continue a foreclosure or repossession.
No. The stay pauses collection while the case proceeds; it is temporary protection tied to the case. Only the discharge at the end of a successful case eliminates qualifying debts. If the case is dismissed instead, the stay ends and collection can resume where it left off.
Congress limited stay protection for repeat filers. After one case dismissed within the prior year, the new stay can expire after 30 days unless the court extends it. After two, the stay may not arise automatically at all, which is why anyone considering a second filing generally gets professional advice first.
It is a request by a creditor, usually a secured lender, asking the court to let it resume a specific remedy such as foreclosure or repossession. The court decides with both sides heard. If relief is granted, only that creditor may proceed; the stay continues to hold for everyone else. Unopposed motions are routinely granted.
It is a two-step calculation that decides whether Chapter 7 is available. Step one compares your household's average monthly income over the six months before filing against your state's median for your household size. Step two, for above-median filers, calculates disposable income using standardized allowances.
The window is the six full calendar months before the filing month. Because the window rolls, the result can change from month to month, and timing a filing after an income drop can legitimately change the math.
Generally not. "Current monthly income" includes most sources, such as wages, business income, rental income, and contributions to household expenses by others, but Social Security benefits are the notable exclusion.
Above-median filers complete the longer Form 122A-2, which subtracts IRS-standard allowances and certain actual expenses from income. If the remaining disposable income is above statutory thresholds, a presumption of abuse arises and Chapter 7 generally gives way to Chapter 13's repayment structure.
No. An above-threshold result generally means Chapter 13 applies instead of Chapter 7. The presumption of abuse can also be rebutted with documented special circumstances, such as a serious medical condition or an active-duty call-up.
Yes. Certain disabled veterans may not face the means test at all, and the same is true for filers whose debts are mostly business debts rather than consumer debts. These carve-outs are technical and fact-dependent.
A consultation is generally worth it when wage garnishment or a bank levy is active or threatened in writing, a foreclosure timeline has started, a lawsuit or judgment has arrived, or debts have exceeded what income can service for six months or more. It is also worth it when any bankruptcy chapter is under consideration, when there has been a prior filing, or when the picture includes business debts, co-signers, family loans, or recent property transfers.
Commonly nothing. Free initial consultations are standard in consumer bankruptcy, though not universal, so many people confirm this when booking. If a case moves forward, Chapter 7 attorney fees are typically flat and paid before filing, while Chapter 13 fees are commonly paid largely through the repayment plan itself.
No. A consultation is information, not a commitment, and people remain free to choose nothing. The attorney lays out the realistic paths, which may include one or more chapters, lawsuit defenses, negotiation, or doing nothing yet.
It is generally a working session, not a sales pitch. The attorney reviews the documents and the money snapshot, runs rough means-test numbers, and asks about assets, transfers, co-signers, and pending deadlines. If filing is on the table, a written fee quote is a normal part of the conversation.
Recent tax returns, pay stubs, bank statements, a statement for every debt, and any lawsuit or garnishment papers. A one-page money snapshot with monthly income, essential expenses, total debts by type, and what is owned helps, with estimates being fine. Anything with a date on it, such as court deadlines, sale dates, or garnishment start dates, belongs at the top of the conversation.
Markers that generally matter include a practice focused on consumer bankruptcy, a steady volume of similar cases, membership in organizations such as NACBA, a clear written fee agreement, and communication that feels workable for months or years. State bar referral services and the NACBA directory are reasonable starting points. Red flags include guaranteed outcomes, fee quotes that shift after signing, and nonlawyer "consultants" offering to handle everything.
Usually not, if two things are true: the equity fits within the homestead exemption that applies in the filer's state, and the mortgage payments continue. The trustee sells a house only when the non-exempt equity is large enough to produce meaningful money for creditors after the lender, selling costs, and the filer's exempt share are paid.
The federal homestead exemption in 11 U.S.C. §522(d)(1) is $31,575 for cases filed from April 1, 2025 through March 31, 2028, and a married couple filing jointly can generally claim twice that. Most states require filers to use the state homestead exemption instead. The state figures range from a few thousand dollars to unlimited.
Often, yes. Section 1322(b)(5) lets a Chapter 13 plan cure the missed payments over three to five years while the filer resumes regular monthly payments. The lender cannot foreclose while the plan is being performed. The cure right ends once the house is sold at a foreclosure sale, so timing the filing matters.
A Chapter 7 discharge removes the filer's personal liability on the mortgage note, but the lender's lien on the house survives. The lender can still foreclose if payments stop; it just cannot pursue the filer for any shortfall. Chapter 13 cannot change the terms of a first mortgage on a principal residence under §1322(b)(2), though it can cure arrears.
Under §522(p), a filer using state exemptions cannot exempt more than $214,000 of interest in a home acquired during the 1,215 days before filing. Equity carried over from a previous home in the same state does not count against the cap. The rule matters mainly in states with large or unlimited homestead exemptions.
The trustee can, but often does not when the non-exempt amount is small. Realtor commissions, closing costs, and the exempt payout come off the top, and a trustee who would net little for creditors typically abandons the property under §554. When the equity is substantial, a sale is likely, and Chapter 13 is usually the way to keep the house.
Educational information — not advice
This page provides general educational information about credit, debt, and consumer protections. It is not legal advice, financial advice, or credit repair services, and reading it does not create any professional relationship. Laws, procedures, deadlines, and dollar amounts vary by state and change over time.
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