Bankruptcy is a federal legal process that can wipe out many debts (Chapter 7) or let you repay over three to five years while keeping property (Chapter 13). Filing triggers an automatic stay that halts most collection actions.
Chapter 7 vs Chapter 13
| Chapter 7 | Chapter 13 | |
|---|---|---|
| How it works | Non-exempt assets may be sold; most unsecured debts discharged | Repay some debt over 3-5 years |
| Who qualifies | Must pass a means test | Need regular income; debt limits apply |
| Typical length | A few months | 3-5 years |
| Good for | Mostly unsecured debt, limited assets | Saving a home from foreclosure, catching up on arrears |
Debts that usually survive
Most student loans, recent taxes, child support and alimony, and debts from fraud.
Before you file
You’ll need to complete credit counseling, and gather income records, tax returns and a list of debts and assets.
Frequently asked questions
Will I lose my house in bankruptcy?
Not necessarily. Exemptions protect some equity, and Chapter 13 can help you catch up on missed mortgage payments.
Questions from readers
Question about Bankruptcy? Ask it here. We answer common questions in general terms on this page. This is not legal advice, and we can’t take your case.
Ask a question
Free · No obligation
Get a free case review
Tell us a little about your situation and we’ll try to connect you with a participating lawyer in your area who handles it.
