Most Americans are just one catastrophic event away from financial ruin. Sometimes a life event (i.e. "shit") happens to us.... And it can overwhelm us with debt. But, fortunately, that doesn't mean your life is ruined forever. In fact, that's exactly why bankruptcy law was created! — for the “honest but unfortunate debtor.”
How Chapter 7 bankruptcy can help you cancel your debts, protect your exempt property, and stop bill collectors.
You can use Chapter 13 bankruptcy to get out from under the burden of your debts, protect important property, and stop bill collectors.
If your creditors will negotiate, if bankruptcy can't cancel most of your debts, or if you're truly broke, bankruptcy may not be the best solution for you. Here's how to decide.
From Adversary proceeding to Wage garnishment
The Federal Court system offers a series of videos (produced in 2010) on how the bankruptcy process works.
Steps for filing bankruptcy in your state, from learning whether you qualify, to completing and filing bankruptcy forms, to discharging your debts and getting on with your life.
Tips for keeping bankruptcy costs down, from court filing fees to mandatory counseling costs to getting legal help.
Most people file for bankruptcy in the federal district court closest to where they've lived for the past six months.
Filing for Chapter 7 bankruptcy means that you'll be dealing with a "bankruptcy trustee" who will be assigned to handle your case. The trustee's job is to gather all non-exempt property you own into the "bankruptcy estate" to determine what (if anything) can be sold and the proceeds distributed to your unsecured creditors. In most cases, there's nothing left — "no-asset" cases make up more than 90% of consumer chapter 7 cases — but the trustee will be looking.
You may be surprised to learn that every federal bankruptcy court has a special section just for people filing bankruptcy without an attorney. Learn how to use this information if you are thinking about filing for bankruptcy.
The law does not require to have a lawyer, and if your case is simple and you have few assets, you can successfully file a Chapter 7 bankruptcy yourself. Chapter 13? Not so much. And if you have property to lose, or you're not great with details, getting a lawyers help can be a good idea, no matter what kind of bankruptcy you're filing. Also a lawyer may find ways to help that you haven't' thought of
Bankruptcy is federal law and you file in the local Federal District Bankruptcy Court. Find out yours.
Yes. You must complete a credit counseling course before you file your bankruptcy petition. Fortunately, it's easy and can be done online. And your case cannot be completed (i.e. you can't get your "discharge order" from the judge until you take a "Debtor Education" course.
Everyone who files for bankruptcy must attend a 341 hearing, which is also called a "creditors meeting." The meeting is conducted by the bankruptcy trustee assigned to your case. During the Coronavirus, it. can be done by phone.
What you need to know about how to get information you need bankruptcy court and what you're likely to encounter on court websites
Can you file online? In some courts, yes, most no. But there are other options that can allow you to file electronically if your case is simple.
All forms for bankruptcy can be dowloaded for free. Here's what you'll need and where to find them.
Where to find the local forms required by your bankruptcy court.
Here are links to the basic forms you need to complete to file your case.
In addition to federal forms. Some courts have their own local forms that you must use. Here's where to find them.
An edited list of the main federal forms for use in all courts.
Your questions about bankruptcy forms
The US government makes PDF bankruptcy forms available for free. We'll tell you which ones you need and links to download them.
A mathematical formula—called the means test—determines whether you qualify for Chapter 7 Bankruptcy in your state. The means test first looks to see if your average income for the past six months is below the median income in your state. And if it is, then it looks at whether would have enough "disposable income" to fund a five-year Chapter 13 debt repayment plan—after allowing for monthly expenses for food, housing, clothing, transportation and medical care, based in part on county-by-county expense standards for your county that the IRS uses in their nationwide tax-collections efforts.
The Means Test Calculator is an automated version of the official three-part test form. Just choose your zip code, and the calculator applies the relevant state median income and county living standards, based on the number of persons in your household, your marital status and what county you live in.
The means test initially looks to see if your household income is above or below median for a household your size in your state.
The bankruptcy means test was added to US bankruptcy law in 2005 as part of the credt-card-industry sponsored bankruptcy law to weed out so-called "bankruptcy-abusers" -- hence the language about a "presumption of abuse" (just to make you feel extra ashamed for exercising your right to bankruptcy!).
The official position of the U.S. Trustee's office of how to interpret issues arising in each line of the means test.
Bankruptcy can eliminate some kinds of debts, like credit card debt and medical debt, but not others, like child support and (in most cases) student loans. And liens associated with "purchase money secured debts", where you have pledged collateral for a loan, also are not affected by a bankruptcy, so you can still lose the collateral to the lien-holder.
Some kinds of debts pass unscathed through bankruptcy, including child support, debts incurred through fraud or other bad acts, most student loan debt, more.
By law, child support obligations generally cannot be avoided in a bankruptcy. They pass pretty much intact.
Yes, but it is much more difficult than discharging other types of unsecured debt like credit cards. You have to prove “undue hardship.” But you might get lucky, if you get the right bankruptcy judge. Be sure to consider non-bankruptcy options.
If you filed tax returns but didn't pay, and the taxes are more than three years old, you may be in luck.
Co-signers will still owe the full amount of the debt, even if you you get your personal liability discharged in Chapter 7 bankruptcy.
Bankruptcy helps you get rid of unsecured debt. It does not eliminate secured debts, where you have pledged collateral for a loan, such as a car loan or a mortgage. When you file bankruptcy you must declare what you intend to do about your secured debts.
Medical debts are the most common of all reasons people choose the "fresh start" option that bankruptcy gives them. Rather than be saddled with a lifetime of debt, bankruptcy can eliminate that.
A "reaffirmation agreement" says that your personal liability for a debt goes unaffected by your bankruptcy. But because that's what bankruptcy is for, they should only be signed on rare occasions.
A detailed listing of state and federal exemption laws, with statutory citations.
The Federal Government adjusts Federal exemption amounts every three years. Does your state adjust exemption amounts?
If there's changes in your state’s exemptions, here's where you'll find out about them.
Federal bankruptcy law has its own list of exemptions 11 U.S.C. § 522, but some states require you to use only the state law exemptions instead, while other states offer a choice of the state or federal exemptions. Find out what your state does.
Your questions about bankruptcy exemptions, answered.
It's important to have a good understanding of what will happen to your property if you file for Chapter 7 bankruptcy.
The short answer is “no.” Such transfers in the years before bankruptcy can be undone by the trustee. And if the court thinks you’re tying to hide assets they can deny your discharge.
When you file, you'll be asked by the court to decide what you want to do about property you've pledged as collateral, and then you have 45 days to act on it. Your options include surrendering the property, "redeeming" the property by essentially buying it outright at it's current (reduced) market value, or "reaffirming" the debt via a contractual agreement to retain your personal liability and keep making payments, or in some cases, "ride through" - that is, keep making payments on the secured debt even though your personal liability has been wiped out.
The answer is, it depends.. on a lot of things: Do you lease or own? If you own the car and are making payments on it, how much of the equity in the car is protected by exemptions allowed in your state? Most people who file for bankruptcy can end up keeping their car, or at least some kind of vehicle that can get them to work and back, but the answer depend on your particular circumstances.
Whether you can keep your house depends on several things, your mortgage, your state's homestead exemption, and foreclosure rules in your state.
Can bankruptcy help stop an eviction? Well, it can delay it, for an extra month or two, in some cases, in some states, if you file early enough in the eviction process. Bankruptcy can, however be a great solution to the problem of "back rent debt" accumulated during the pandemic.
How to find a bankruptcy lawyer serving
LegalConsumer has helped thousands of people like you connect with bankruptcy attorneys who can help them.
Here are ten ways that a bankruptcy lawyer can help guide you through the bankruptcy process to make sure you take maximum advantage of what the law offers debtors.
If you need clerical help -- not legal help -- a bankruptcy petition preparer can produce your bankruptcy court forms for a reasonable fee.
What We're Reading about Bankruptcy, Debt and Credit. Timely, useful articles, from reliable sources.
Where to read up on news about about debt, credit, and bankruptcy. These sources report frequently on issues of debt, credit, consumer finance, and student loans.
Economic Statistics that relate to bankruptcy, such as savings rates, default rates, and outstanding consumer debt, secured and unsecured, like credit card debt, student loan debt, and auto loans.
Good videos and audio information about bankruptcy, for those who listen better than they read...
Many local news stations have consumer reporters who keep up to date on the latest benefits and other laws that affect consumers.
What we're Tweeting, in our twitter accounts @meanstest (for bankruptcy) and @lawbyzip
The latest from our blog on bankruptcy news and legislation that affects consumers.
LegalConsumer.com's "BankruptcyByZIpCode" website has provided free, local bankruptcy information to more than 10 million consumers since 2006! Find important, local legal information about questions like:
The Free Means Test Calculator (2022 Edition) has been used for over 15 years by hundreds of thousands of anonymous consumers curious about where they stand in relation to the bankruptcy means test, created by the 2005 BAPCPA bankruptcy act.
In addition to the means test calculator, this site has answers to your questions about bankruptcy:
Note: This website is updated as time permits. It's is up to you to contact your local court and confirm and update any information you need. Information is not advice. See a bankruptcy lawyer for advice about how the law relates to your exact situation.