Knowledge Base

• What Is Chapter 7 Bankruptcy? • Do I Need A Lawyer to File? • DIY Chapter 7 (Filing On Your Own) • What Is the Automatic Stay? • What Happens at the 341 Meeting? • What Does the Trustee Do? • Bankruptcy Estate Explained • Secured vs Unsecured Debts • Exemptions Overview • Discharge vs Dismissal • What Creditors Can and Can’t Do • Reaffirmation Overview • Non-Exempt Property • Chapter 7 Timeline • What Bankruptcy Does NOT Do • Means Test Explained  • Chapter 7 vs Chapter 13 • How Much Does Chapter 7 Cost? • What To Expect After Filing • Credit Counseling & Financial Management Courses

Chapter 7 bankruptcy is a federal court process that allows qualifying individuals or businesses to wipe out (discharge) certain types of unsecured debt, such as credit cards, medical bills, and personal loans. It’s often called a “liquidation” bankruptcy because, in theory, a trustee could sell non-exempt property and use the money to pay creditors.

In practice, many Chapter 7 cases are “no-asset” cases, meaning the trustee does not find anything they can take and sell under the law. The person filing keeps their exempt property (the stuff protected by exemption laws), and any qualifying dischargeable debt is eliminated at the end of the case.

Chapter 7 is meant to give an honest but overwhelmed debtor a fresh start under the law. Eligibility depends on things like income, household size, and prior bankruptcy history, and outcomes vary from case to case.

Key things to know:

• Handled in federal bankruptcy court, not state court.

• Often used for unsecured consumer debts (credit cards, medical, etc.).

• A trustee is assigned to review the case and look for non-exempt assets.

• Many cases are no-asset, with nothing for the trustee to sell.

• Not all debts are dischargeable (for example, many taxes, child support, and most student loans usually survive).

A person is not legally required to hire a lawyer to file a Chapter 7 bankruptcy case. Individuals may file “pro se,” meaning they submit their own forms and represent themselves throughout the process. The court provides access to forms and general procedural information, but it does not offer legal advice, strategic guidance, or personalized instructions.

While hiring an attorney is not mandatory, the decision depends on the filer’s comfort level with legal paperwork, documentation, deadlines, and court procedures. Bankruptcy involves detailed financial disclosures, strict timelines, and specific requirements, and the court expects all filings—whether prepared by an attorney, a petition preparer, or the filer themselves—to be complete and accurate. Individuals should carefully assess their ability to navigate the process on their own, as mistakes can delay the case or affect the outcome.

Key things to know:

• Filing without an attorney is allowed (“pro se” filing).

• The court cannot provide legal advice or help complete the forms.

• All paperwork must be accurate and complete regardless of who prepares it.

• Attorneys are optional, not required.

• The decision depends on the filer’s comfort with paperwork and procedures.

A DIY (do-it-yourself) Chapter 7 filing, also known as filing pro se, means the individual prepares and files all required bankruptcy forms without an attorney’s representation. This typically includes gathering financial documents, completing the petition and schedules, taking the mandatory courses, submitting the forms to the court, and responding to trustee requests. Many people successfully file on their own each year, but the process requires thorough organization and attention to detail.

DIY filers must be prepared to meet deadlines, follow federal and local rules, attend the 341 meeting, and maintain complete accuracy in all disclosures. The court holds self-filers to the same standards as attorney-represented cases. A DIY approach may be workable for individuals with straightforward finances and simple cases, but it still requires careful reading and precise completion of all required forms.

Key things to know:

• A person can file Chapter 7 on their own without a lawyer.

• DIY filers complete all forms, requirements, and deadlines themselves.

• Accuracy and completeness are critical.

• The court cannot help with legal questions or form decisions.

• Works best for simple, well-organized financial situations.

The automatic stay is a powerful legal protection that begins the moment a bankruptcy case is filed. It acts like a court-ordered pause button on most collection actions. Creditors generally must stop:

• Lawsuits and collection actions

• Wage garnishments

• Most repossession efforts

• Foreclosure sales (at least temporarily)

• Harassing collection calls and letters

The automatic stay exists to protect both the person filing and the overall bankruptcy process. It keeps creditors from racing each other and gives the court time to sort out who is owed what.

The stay is strong, but not unlimited. Certain types of actions may continue under specific rules, and creditors can sometimes ask the court to lift (remove) the stay in particular situations.

Key things to know:

• Takes effect automatically at filing—no separate motion needed.

• Stops most collection efforts temporarily.

• Violating the stay can have consequences for creditors.

• Creditors can file a motion to lift the stay in some situations.

• The stay usually ends when the case is closed, dismissed, or discharge is entered.

The 341 Meeting of Creditors (often just called “the 341” or “the meeting of creditors”) is a required step in every bankruptcy case. Despite the name, it usually isn’t dramatic.

There is no judge at this meeting. Instead, the trustee assigned to the case runs the show. The person who filed the case must appear (in person, by phone, or by video, depending on the court’s procedures) and answer questions under oath about their finances and their paperwork.

Creditors have the right to attend and ask questions, but in many consumer Chapter 7 cases, few or none actually show up. The meeting is typically short—often 5 to 10 minutes—unless something needs extra attention.

Key things to know:

• Required in every bankruptcy case.

• Led by the trustee, not a judge.

• The debtor answers questions under oath about income, assets, debts, and forms.

• The meeting is usually brief unless something unusual is going on.

• Creditors can attend and ask questions, but often do not.

The Chapter 7 trustee is an individual appointed to administer the case. The trustee is not the debtor’s lawyer, not the judge, and not the creditor’s representative. They are more like a neutral administrator whose job is to make sure the process follows the law.

The trustee reviews the bankruptcy forms, looks for non-exempt property, checks for potential fraud or hidden assets, and sometimes sells non-exempt property to pay creditors. The trustee also conducts the 341 meeting and may ask for additional documents like bank statements, pay stubs, or tax returns.

In many cases, the trustee concludes there are no assets to distribute and files a report saying so. In other cases, the trustee may collect and distribute funds to creditors according to the priority rules in the Bankruptcy Code.

Key things to know:

• Appointed to administer the case and review the paperwork.

• Conducts the 341 meeting.

• Looks for non-exempt assets that can be sold for creditors.

• May request extra documents to verify the information in the forms.

• Files reports with the court about the status and outcome of the case.

When a Chapter 7 case is filed, a legal concept called the bankruptcy estate is created. The estate includes almost all of the debtor’s legal and equitable interests in property at the time of filing. That can include things like real estate, vehicles, bank accounts, personal property, and certain legal claims.

The estate is what the trustee looks at to determine whether there’s anything that can be sold for the benefit of creditors. However, exemption laws exist to allow the debtor to protect certain property from being used to pay creditors.

So in simple terms: the estate is the pool of property that’s temporarily under the jurisdiction of the bankruptcy process, subject to exemptions and other rules.

Key things to know:

• The estate forms automatically when the case is filed.

• It includes most property interests as of the filing date.

• Exemptions allow the debtor to protect certain property.

• The trustee administers estate property for the benefit of creditors.

• Some property acquired after filing may or may not become part of the estate, depending on the type and timing.

Debts in bankruptcy are often divided into two main categories: secured and unsecured.

A secured debt is tied to specific collateral. Common examples include mortgages (secured by a house) and car loans (secured by a vehicle). If the debtor doesn’t pay, the creditor may have the right to take back the property (through foreclosure or repossession), subject to legal procedures.

An unsecured debt is not tied to a specific piece of property. Examples include credit cards, medical bills, personal loans without collateral, and many collection accounts.

This distinction matters in bankruptcy because secured creditors have rights in the collateral, while unsecured creditors usually just share in whatever funds (if any) are available.

Key things to know:

• Secured debt = tied to property (collateral).

• Unsecured debt = no specific property backing it.

• Secured creditors may have the right to recover or sell the collateral.

• Unsecured creditors are paid, if at all, from whatever funds remain after higher-priority claims.

• Some unsecured debts are “priority” debts, which may get paid before others (for example, certain taxes or support obligations).

Exemptions are laws that allow a person filing bankruptcy to protect certain property from being taken and sold by the trustee. The idea is that a debtor should be able to keep basic necessities and some core property while getting a fresh start.

Exemptions can apply to things like a portion of home equity, a vehicle up to a certain value, household goods, clothing, tools of the trade, retirement accounts, and more. The exact amounts and categories depend on whether state or federal exemption rules apply and which ones are allowed in a particular case.

If property is fully covered (or “fully exempt”) under the applicable exemption rules, the trustee generally can’t take it for the benefit of creditors.

Key things to know:

• Exemptions protect certain property from being used to pay creditors.

• The types and amounts of exemptions depend on which laws apply in the case.

• Fully exempt property typically stays with the debtor.

• Non-exempt property may be sold by the trustee.

• Exemption planning and strategy can be complex and fact-specific.

In bankruptcy, discharge and dismissal mean very different things.

A discharge is a court order that releases the debtor from personal liability for certain debts. After discharge, creditors covered by the order generally cannot collect those debts from the debtor personally. Not all debts are dischargeable, but for those that are, discharge is often the main goal of filing.

A dismissal, on the other hand, means the case is closed without a discharge. It’s as if the bankruptcy case is stopped before it finishes. Depending on the circumstances, creditors may be able to resume collection efforts as if the case hadn’t happened, and certain protections like the automatic stay end.

Key things to know:

• Discharge = qualifying debts are wiped out as to personal liability.

• Dismissal = case ends early with no discharge.

• After discharge, creditors included in the order usually can’t continue collecting.

• After dismissal, collection efforts generally may continue or resume.

• Eligibility for discharge depends on multiple factors, including prior filings and the types of debts.

Once a bankruptcy case is filed, creditors are subject to a mix of bankruptcy rules and general consumer protection rules.

In many cases, creditors cannot:

• Continue most collection lawsuits

• Garnish wages (subject to certain exceptions)

• Call repeatedly to collect on debts covered by the automatic stay

• Repossess collateral without following legal procedures and orders

However, creditors can:

• File claims in the bankruptcy case

• Ask the court to lift the automatic stay in some situations

• Object to discharge in limited circumstances (for example, alleging fraud)

• Continue to collect on debts that are not subject to the discharge or not included in the case

The exact boundaries of what creditors can or can’t do depend on the type of debt, the timing of the actions, and court orders in the specific case.

Key things to know:

• The automatic stay and discharge order restrict many collection activities.

• Creditors can file motions and objections within the case.

• Some debts may remain collectible even after bankruptcy.

• Violations of the automatic stay or discharge order can carry legal consequences.

A reaffirmation agreement is a voluntary agreement in which the debtor and a creditor agree that a particular debt will survive the bankruptcy discharge. In other words, the debtor agrees to remain personally responsible for that debt even after the case ends.

Reaffirmation is most commonly discussed with secured debts like car loans. Some debtors choose to reaffirm a loan if they want to keep a vehicle and the lender requires reaffirmation as a condition of continuing the contract.

Reaffirmation agreements generally must meet specific legal requirements and usually need to be filed with and, in some cases, approved by the court.

Key things to know:

• Reaffirmation keeps a specific debt outside the discharge.

• Often used with vehicle loans or other secured debts.

• It’s a voluntary agreement between debtor and creditor.

• It can have serious consequences if the debtor later can’t make payments.

• Reaffirmation is subject to strict rules and review.

Non-exempt property is property that is not fully protected by exemption laws in a bankruptcy case. This is the type of property the trustee may be able to take and sell for the benefit of creditors.

Examples might include:

• Valuable collectibles or art

• Extra vehicles beyond what exemptions cover

• Real estate with equity above the allowed exemption amount

• Certain investments or non-retirement accounts

Not every piece of non-exempt property is automatically sold. The trustee considers the value, the cost of sale, and whether selling it would actually produce money for creditors after expenses.

Key things to know:

• Non-exempt property is potentially available for liquidation.

• The trustee decides whether selling it makes economic sense.

• Many Chapter 7 cases have no non-exempt assets to sell.

• Exemption rules determine what is exempt vs. non-exempt.

While every case is unique, a typical individual Chapter 7 case follows a fairly standard timeline.

Bankruptcy can be a powerful financial reset, but it’s not a magic wand that fixes everything. Chapter 7 eliminates many unsecured debts, but there are important limits on what bankruptcy can accomplish. Understanding what bankruptcy does NOT do helps set realistic expectations and prevents misunderstandings about outcomes.

Bankruptcy generally does not erase certain types of debts. For example, most student loans remain unless they qualify under highly specific hardship standards. Recent tax debts or certain government debts may also survive the process. Bankruptcy does not cancel child support or alimony obligations, and it doesn’t erase debts resulting from certain court judgments involving fraud or willful misconduct.

Bankruptcy also does not “fix” secured debts by itself. If someone wants to keep a house or a car with a loan attached, they typically must stay current on payments. Bankruptcy can temporarily pause foreclosure or repossession through the automatic stay, but it does not permanently stop the creditor’s rights to the collateral if payments are not maintained.

Additionally, bankruptcy does not guarantee credit score improvement or immediate financial recovery. While for some people a discharge eventually leads to better financial footing, bankruptcy is not a substitute for ongoing budgeting, income planning, or long-term financial habits.

Key things bankruptcy does NOT do:

• Does not eliminate most student loans

• Does not wipe out child support or alimony

• Does not remove tax liens or certain recent taxes

• Does not automatically stop repossession or foreclosure long-term

• Does not cancel secured debts while keeping the collateral

• Does not erase debts obtained through fraud, certain judgments, or intentional harm

• Does not repair credit instantly

• Does not replace ongoing financial management

The means test is a formula used in many consumer bankruptcy cases to help determine whether a debtor qualifies for Chapter 7 or whether a different chapter might be more appropriate under the law.

The test generally compares the debtor’s income (often looked at over the prior six months) to the median income for a similar household size in their state. If income is below the applicable median, the person often “passes” the first part of the test. If income is above, there’s a more detailed calculation of allowed expenses and disposable income.

The purpose of the means test is to help prevent people with higher disposable incomes from using Chapter 7 when they may be able to repay some of their debts through another chapter. The actual calculations can be detailed and depend on current legal thresholds and data.

Key things to know:

• Applies mainly to consumer cases, with some exceptions.

• Compares income and allowed expenses to see if Chapter 7 is presumed appropriate or not.

• Uses state-specific and household-size-specific median income numbers.

• Thresholds and figures change periodically.

• A presumption under the means test is not always the final word; there can be ways to rebut or clarify.

Understanding these limitations helps set clear expectations about how Chapter 7 will affect your financial situation.

While both Chapter 7 and Chapter 13 fall under federal bankruptcy law, they operate very differently and serve different purposes. Understanding these differences helps people recognize which chapter applies to which situation — though this site deals only with Chapter 7 preparation services.

Chapter 7 is often called a liquidation bankruptcy. It focuses on wiping out qualifying unsecured debts relatively quickly. A trustee reviews the case, checks for non-exempt property, and may liquidate certain assets (though many cases are “no-asset”). Chapter 7 usually lasts a few months from filing to discharge, and there is no payment plan. Not everyone qualifies — eligibility depends on income, household size, and other factors.

Chapter 13, on the other hand, is a repayment plan bankruptcy. Instead of eliminating debts immediately, the debtor proposes a court-approved plan lasting three to five years. During that time, they make monthly payments to a trustee, who distributes the money to creditors according to legal priorities. Chapter 13 is often used to catch up on mortgage arrears, stop certain types of repossessions, pay back tax debt over time, or protect non-exempt property that might be at risk in Chapter 7.

Another major difference is how secured debts are handled. In Chapter 13, a person may be able to restructure or catch up on missed payments through the plan. Chapter 7 does not provide a structured repayment option — keeping secured property generally depends on staying current with payments and exemptions.

• No payment plan

• Faster process (typically months)

• May involve liquidation of non-exempt assets

• Strong focus on eliminating unsecured debt

• Income limits may apply

• 3–5 year repayment plan

• Allows catching up on mortgage/car payments

• Protects certain property that might otherwise be at risk

• Can address certain debts Chapter 7 cannot

• Requires enough income to support a monthly plan

Each option serves a different purpose based on your specific financial situation. 

Note: Petition preparation services offered on this site are limited to Chapter 7 bankruptcy only.

The cost of filing a Chapter 7 case includes the court filing fee, required credit counseling courses, and any optional service fees depending on how the forms are prepared. As of current federal guidelines, the Chapter 7 filing fee is $338, which includes administrative and trustee surcharges. This amount is paid directly to the bankruptcy court when filing the case unless a payment plan or fee waiver is approved by the court.

In addition to court fees, the filer must complete two mandatory courses: a pre-filing credit counseling session and a post-filing financial management course. Each course typically ranges from about $10–$50, depending on the provider. If a petitioner hires someone to help prepare forms, that service cost varies based on the provider and complexity, but it is separate from the court’s own fees.

Key points:

• Filing fee is typically $338

• Two mandatory courses cost around $10–$50 each

• Payment plans or waivers may be available depending on the court

• Preparation fees vary depending on who completes the forms

Once a Chapter 7 bankruptcy case is filed, several important steps occur automatically. The court generates a case number, assigns a trustee, and sends official notices to creditors. The automatic stay goes into effect right away, which means most collection activity must pause while the case moves forward.

Shortly after filing, the court schedules the 341 Meeting of Creditors, and the trustee will review the forms submitted to ensure they are complete and consistent. The trustee may request additional documents such as recent bank statements, pay stubs, or tax returns to verify information. Creditors receive notice of the case and may update their internal records or contact the trustee if they have questions.

Filing also triggers the requirement to complete the second mandatory course—called the post-filing financial management course. This course must be completed before the court will issue a discharge. Most filers take the course online and file the completion certificate shortly afterward.

In many straightforward Chapter 7 cases, the process after filing is relatively quick. As long as all paperwork is complete, deadlines are met, and there are no objections from the trustee or creditors, the discharge is typically entered a few months after the case is filed. Once the discharge is granted and the trustee finishes administration, the court closes the case.

Key points:

• Automatic stay begins immediately

• Trustee is assigned and 341 meeting is scheduled

• Creditors receive notice and may update their records

• Trustee may request financial documents

• Debtor completes post-filing financial course

• Discharge often occurs a few months after filing

Before and after filing a Chapter 7 case, the filer must complete two separate educational requirements: a pre-filing credit counseling course and a post-filing financial management course. Both must be taken through providers approved by the U.S. Trustee Program, and each one generates its own certificate that must be filed with the court.

The pre-filing credit counseling course must be completed before submitting a bankruptcy petition. It typically takes about an hour and covers budgeting, income and expenses, and an overview of available debt-relief options. The certificate must be included when the case is filed, or the court may reject the petition.

The post-filing financial management course (sometimes called debtor education) must be completed after the case is filed. This course focuses on long-term financial skills, money management, and financial planning basics. The certificate for this course must be filed before discharge can be entered. Without it, the court will not issue a discharge even if everything else in the case is complete.

Key points:

• Two different required courses: one before filing, one after filing

• Both must be from approved providers

• Each produces a separate certificate

• Pre-filing = credit counseling

• Post-filing = financial management/debtor education

• Failure to complete either one can delay or affect the case

If you’re ready to move forward, the first step is completing the intake form.