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Bankruptcy

Bankruptcy is a federal right, and its most immediate effect is the automatic stay: the moment you file, most collection activity must stop — the calls, the lawsuits, the wage garnishment, the foreclosure sale, the repossession. Choosing between Chapter 7 and Chapter 13 is the decision that shapes everything after, and it is difficult to reverse. Call 1-844-690-0555 free, any hour — and a one-hour consultation with a licensed US attorney ($195, a fixed fee) can be booked right on the call.

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Bankruptcy at a glance

The automatic stay is immediate

Most collection must stop on filing, including garnishment and foreclosure

Chapter 7 discharges; Chapter 13 repays

Chapter 7 wipes qualifying debt quickly; Chapter 13 is a multi-year plan that can save a home

Credit counseling is required

From an approved provider before filing, and a financial management course before discharge

Some debts survive

Most student loans, recent taxes, child support and alimony, and debts from fraud

Exemptions decide what you keep

And they vary dramatically between states

Choosing the chapter

Chapter 7 is liquidation: qualifying unsecured debts are discharged in a matter of months, non-exempt property may be sold, and eligibility depends on a means test comparing your income to the state median. Chapter 13 is a repayment plan over several years for people with regular income — slower and more demanding, but it can stop a foreclosure and let you cure mortgage arrears over time, which Chapter 7 generally cannot, and it protects co-signers better. If keeping a house with arrears is the goal, that usually points to Chapter 13; if the problem is unsecured debt and there is little property at risk, Chapter 7. Talk it through with a lawyer now →

What bankruptcy does not fix

Most student loans, unless you bring a separate proceeding and meet a demanding hardship standard. Recent tax debt, though older income taxes can sometimes be discharged. Child support and alimony, always. Debts arising from fraud, willful injury, or drunk driving. Criminal fines and restitution. Secured debts survive as liens — discharge removes your personal liability but the lender can still take the collateral, so keeping a car or a house means continuing to pay for it. Understanding this list before filing prevents the most common disappointment. Talk it through with a lawyer now →

Exemptions, and the state lottery

What you keep depends on exemptions, and the differences between states are enormous — particularly the homestead exemption, which protects equity in your home and ranges from very modest amounts to unlimited in a few states. Some states let you choose between the state and federal exemption schemes; others require the state's. Residency rules determine which state's exemptions you may use, and they look back over a period specifically to stop people relocating to a friendlier state before filing. This is the single most important reason to get advice before filing rather than after. Talk it through with a lawyer now →

Considering bankruptcy, step by step

List every debt, asset and recent transferTransfers and payments to family before filing are examined closely.

Complete approved credit counselingRequired before you can file.

Get advice on the chapter and the exemptionsThe choices are hard to reverse. Call 1-844-690-0555 free, any hour — and a one-hour consultation with a licensed US attorney ($195, a fixed fee) can be booked right on the call.

Bankruptcy — your questions answered

Will bankruptcy stop a foreclosure or a garnishment?

Filing triggers the automatic stay, which stops most collection immediately, including a scheduled foreclosure sale and an active wage garnishment. Whether it solves the underlying problem is a different question: Chapter 13 lets you cure mortgage arrears over a plan and keep the home, while Chapter 7 typically only delays a foreclosure unless you can bring the loan current. Timing matters enormously when a sale date is set.

How long does bankruptcy stay on my credit report?

Generally up to ten years for a Chapter 7 and seven for a Chapter 13, measured from the filing date. In practice, many people find their credit begins recovering well before that, because the discharge removes the delinquent accounts that were doing the most damage. The realistic comparison is not bankruptcy versus clean credit, it is bankruptcy versus years of defaults, judgments and garnishments.

Can I file bankruptcy without a lawyer?

You are allowed to — it is called filing pro se — but the federal courts themselves strongly recommend against it, and court staff and judges are prohibited by law from giving you legal advice. The consequences of choosing the wrong chapter, misapplying exemptions or filling in schedules incorrectly are serious and often permanent: cases get dismissed, property gets sold, discharges get denied.