What is the difference between Chapter 7 and Chapter 13 bankruptcy?
Chapter 7 is a liquidation bankruptcy that wipes out most unsecured debt — credit cards, medical bills, personal loans — in about 4 months. A trustee may sell non-exempt assets to pay creditors, but most filers keep everything. Chapter 13 is a reorganization bankruptcy where you propose a 3–5 year repayment plan to catch up on mortgage arrears or car loans while discharging remaining unsecured debt at the end.
Do I need a lawyer to file for bankruptcy?
No. Individuals are legally permitted to file bankruptcy without an attorney — this is called filing "pro se." You file in the U.S. Bankruptcy Court for your district. The forms are standardized federal forms available at uscourts.gov. uplaw.ai walks you through every form at no cost.
What is the bankruptcy means test?
The means test determines whether you qualify for Chapter 7. It compares your average monthly income over the past 6 months against your state's median income. If you are below the median, you qualify automatically. If above, you must complete a second calculation subtracting allowed expenses. If disposable income is too high, you must file Chapter 13 instead.
What debts can be discharged in bankruptcy?
Dischargeable debts include credit card balances, medical bills, personal loans, utility arrears, and most civil judgments. Non-dischargeable debts include student loans (with narrow exceptions), child support, alimony, most taxes, criminal fines, and debts from fraud or willful injury.
What is an automatic stay in bankruptcy?
The moment you file your bankruptcy petition, an automatic stay goes into effect. It immediately stops all collection calls, lawsuits, wage garnishments, foreclosures, repossessions, and utility shutoffs. Creditors who violate the stay can be sanctioned by the court. The stay lasts until the case closes or is dismissed.
What forms do I need to file Chapter 7 bankruptcy?
The core forms are: Voluntary Petition (B101), Schedule A/B (property), Schedule C (exemptions), Schedule D (secured creditors), Schedule E/F (unsecured creditors), Schedule G (executory contracts), Schedule H (codebtors), Schedule I (income), Schedule J (expenses), Statement of Financial Affairs (B107), and the Means Test (B122A-1). Filing fees are $338 for Chapter 7 and $313 for Chapter 13.
What property can I keep when I file bankruptcy?
Bankruptcy exemptions protect certain assets from the trustee. Federal exemptions include up to $27,900 in home equity (homestead), $4,450 for a vehicle, $700 per household item in household goods, $1,875 in jewelry, and $2,800 in tools of the trade. Many states have their own exemptions that may be more generous. Retirement accounts (401k, IRA) are generally fully protected.
How does bankruptcy affect my credit score?
A Chapter 7 bankruptcy stays on your credit report for 10 years; Chapter 13 stays for 7 years. Your score will drop significantly after filing — typically 130–200 points — but many filers start rebuilding with a secured credit card within 1–2 years of discharge. Most people who file have already damaged their credit through missed payments before filing.
What is a 341 meeting of creditors?
About 30–45 days after filing, you attend a mandatory 341 meeting (named after the bankruptcy code section). The trustee asks you questions under oath about your assets, income, and petition accuracy. Creditors may attend but rarely do. The meeting typically lasts 5–10 minutes. You must bring a government-issued ID and proof of your Social Security number.
Can I file bankruptcy on student loans?
Student loans are not automatically discharged in bankruptcy. You must file a separate adversary proceeding and prove "undue hardship" under the Brunner test — that repayment would prevent a minimal standard of living, your situation is likely to persist, and you have made good-faith repayment efforts. Courts rarely grant full discharge, but partial discharge and settlements do occur.
Will I lose my house if I file bankruptcy?
Not necessarily. If your home equity is within your state's homestead exemption, the trustee cannot sell your home in Chapter 7. If you are behind on your mortgage, Chapter 13 lets you catch up through the repayment plan. However, if you stop making mortgage payments, your lender can seek relief from the automatic stay and foreclose regardless of the bankruptcy.
How long does the bankruptcy process take?
Chapter 7 typically concludes in 4–6 months from filing to discharge. Chapter 13 takes 3–5 years to complete the repayment plan, after which remaining unsecured debts are discharged. If you convert from Chapter 13 to Chapter 7, the clock resets. Emergency filings (bare petition) can be submitted within hours and activate the automatic stay immediately.
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