Is bankruptcy right for me?
Bankruptcy isn't failure — it's a legal tool, and for some people it's the fastest way to stop drowning. These guides walk you through it in order: the signs it may be time, the means test, Chapter 7 vs. Chapter 13, what you keep, what can't be erased, what it costs and where to find free help, and how to rebuild your credit afterward.
Your reading path
- 1Is bankruptcy right for me? Signs it's time to consider itIf you’re finding that you just can’t make ends meet and creditors are hounding you, you've probably wondered about bankruptcy. It's a big step, and it isn't right for everyone, but for some people, it's a way to stop drowning and start over.
- 2Everything you need to know about the means testThinking about Chapter 7 bankruptcy? If so, you'll hear about the "means test" early on. The means test checks whether your income is low enough to erase your debts without a repayment plan, and most people who take it pass.
- 3Chapter 7 vs. Chapter 13: the two kinds of personal bankruptcyWhen people talk about personal bankruptcy, they almost always mean either Chapter 7 or Chapter 13. Both can stop collections, but they work very differently, and there isn’t a single path forward that’s right for everyone.
- 4What you keep in bankruptcyThe biggest fear most people have about bankruptcy is losing everything, which can keep them from filing in the first place. The truth is that people who file usually keep most or all of what they own, thanks to exemptions.
- 5Debts bankruptcy can't eraseBankruptcy can get rid of a lot of debt, including credit cards, medical bills, payday loans, and personal loans. However, it isn't a magic eraser. Some debts survive no matter which chapter you file.
- 6How much does bankruptcy cost, and how do you find helpIt’s a frustrating situation to find yourself in. You might need bankruptcy because you're out of money, but filing costs money too. The good news is that the costs are usually lower than people expect, and there are real ways to cut them, including free help.
- 7Rebuilding your credit after bankruptcyYou might think the goal of bankruptcy is getting your debts discharged. Yes, that will give you the restart you need, but it’s after discharge that the real work begins: rebuilding your credit.
Related questions
Common questions people ask along this path.
Will I lose everything if I file?
Not usually. Most people who file keep most or all of their belongings, thanks to protections called exemptions.
Will my employer find out?
Bankruptcy is public record, but employers aren't usually notified. Private employers can't fire you just for filing.
Can I file without a lawyer?
Yes, but it's risky. Simple Chapter 7 cases are sometimes filed alone. Chapter 13 almost always needs a lawyer.
Does Chapter 13 have a means test too?
Yes, there’s a version of it. Chapter 13 uses a similar form to decide how long your plan lasts and how much you'll pay each month.
Does my spouse's income count if only I'm filing?
Yes, in most cases. Household income counts, but some of your spouse's expenses can be subtracted.
Can I take the means test myself?
Online calculators can help, but given the complexity of the form, an attorney’s guidance is important.
Do I have to pay back anything in Chapter 7?
No, not usually. You only lose property that isn't protected, and most filers don't have any.
Can married couples file together?
Yes, spouses can file a joint case in either chapter.
Which chapter costs more?
Chapter 13 usually costs more. Attorney fees are higher because the case lasts years, but a lot of those can be paid through your plan instead of upfront.
Can I keep my car if I'm behind on payments?
In Chapter 13, often yes. In Chapter 7, you'll usually need to catch up or work something out with the lender.
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