Question 1

How long does Chapter 7 bankruptcy take?

Accepted Answer

Chapter 7 bankruptcy typically takes 3 to 4 months from filing to discharge. The process involves filing your petition, attending a 341 meeting of creditors about 30 days later, and then waiting approximately 60 days for the court to enter your discharge order.

Question 2

Do I lose everything if I file Chapter 7?

Accepted Answer

No. Most Chapter 7 filers keep everything they own. Federal and state bankruptcy exemptions protect your home equity, vehicles, retirement accounts, household goods, and personal property up to specified limits. Over 95% of Chapter 7 cases are 'no-asset' cases where the filer keeps all their property.

Question 3

What is the income limit for Chapter 7?

Accepted Answer

There is no hard income limit for Chapter 7. Instead, you must pass the means test, which compares your household income to the median income for your state and household size. If your income is below the state median, you automatically qualify. If above, you may still qualify after deducting allowed expenses.

Question 4

How much does it cost to file bankruptcy?

Accepted Answer

Filing Chapter 7 bankruptcy costs $338 in court fees plus $1,000 to $2,500 in attorney fees, for a typical total of $1,400 to $2,900. Chapter 13 costs $313 in court fees plus $2,500 to $5,000 in attorney fees. Filing pro se (without an attorney) reduces the cost to just the court filing fee.

Question 5

What debts are not discharged in bankruptcy?

Accepted Answer

Most tax debts less than 3 years old, student loans (unless you prove undue hardship), child support, alimony, court-ordered restitution, and debts from fraud or DUI injuries cannot be discharged in bankruptcy. Most other unsecured debts -- credit cards, medical bills, personal loans -- are fully dischargeable.

Question 6

Can I keep my car if I file Chapter 7?

Accepted Answer

Yes, most people keep their car in Chapter 7 bankruptcy. If you are current on payments and your equity is within your state's vehicle exemption, you can sign a reaffirmation agreement to keep the car and continue making payments. If you own the car outright, the exemption protects equity up to the state limit.

Question 7

How long does bankruptcy stay on your credit report?

Accepted Answer

A Chapter 7 bankruptcy stays on your credit report for 10 years from the filing date. A Chapter 13 bankruptcy stays for 7 years from the filing date. However, most people see meaningful credit score improvement within 12-24 months of discharge, often reaching 650+ within 2 years.

Question 8

Can I file bankruptcy on medical bills only?

Accepted Answer

You cannot file bankruptcy on only medical bills -- bankruptcy covers all your debts at once. However, you are not required to pay back all creditors. In Chapter 7, medical bills are fully discharged along with other unsecured debts. Medical debt is the leading cause of bankruptcy filings in America.

Question 9

What happens to my house in Chapter 7 bankruptcy?

Accepted Answer

In Chapter 7, your home is protected by your state's homestead exemption. If your equity is within the exemption limit, you keep the house and continue making mortgage payments. Some states like Texas, Florida, and Kansas offer unlimited homestead exemptions. You must stay current on your mortgage to keep the home.

Question 10

Can I file Chapter 7 if I have a job?

Accepted Answer

Yes, having a job does not disqualify you from Chapter 7. You must pass the means test, which compares your income to your state's median. Many employed people qualify because the means test accounts for taxes, living expenses, secured debt payments, and other deductions that reduce your disposable income.

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