The short answer
Filing triggers the automatic stay, which the federal courts describe as generally stopping collection actions including lawsuits, wage garnishments, and collection calls. It can discharge most remaining debts. It does not erase every obligation — alimony, child support, certain taxes, and criminal restitution are among those it does not reach.
Your reading roadmap
01
What the automatic stay actually does
The stay takes effect on filing and generally halts collection activity while the case proceeds. The federal courts describe it as stopping creditors from initiating or continuing lawsuits, wage garnishments, and even telephone calls demanding payment. It is the most immediate practical benefit of filing, and it is why timing matters when a sale date or garnishment is imminent.
02
What the stay does not do
The stay is broad rather than absolute: exceptions exist, and it can be limited in certain circumstances, including for repeat filings. Creditors can also ask the court to lift it in defined situations. Treating it as complete permanent protection is a mistake, which is why the specific situation needs review rather than an assumption.
03
Debts a discharge does not reach
A discharge releases an individual from personal liability for most debts and bars creditors from collecting them. The federal courts identify categories it does not cover, including alimony and child support, certain taxes, and criminal restitution. Student loans have their own analysis, and debts secured by property may need to keep being paid if you want to keep the property.
04
Chapter 7 and Chapter 13 solve different problems
Chapter 7 is a liquidation, in which an impartial trustee can sell property that is not exempt and distribute the proceeds to creditors before a discharge is entered. Chapter 13 enables individuals with regular income to repay all or part of their debts through a plan, with payments made to a trustee over a period set by the court, and it can address mortgage arrears in ways Chapter 7 generally cannot.
- Chapter 7: liquidation, faster, nonexempt property may be sold
- Chapter 13: repayment plan, requires regular income and sustained payments
- Chapter 13 includes a co-debtor stay for certain consumer debts
- Both require pre-filing credit counseling from an approved agency
- Both require a financial management course before discharge
- Exemptions depend on state law in either chapter
05
Property is where state law takes over
Federal law provides the framework, but exemptions — the protections that decide what you keep — depend on the state you live in. This is the single most state-dependent part of the analysis and the reason general reassurance about keeping your property is not worth much. In many consumer cases there is no nonexempt property to sell, but that conclusion has to be reached rather than assumed.
06
Requirements before and during a case
The federal courts state that no individual may be a debtor under any chapter without receiving credit counseling from an approved agency within the period before filing set by the Bankruptcy Code, with narrow exceptions, and a financial management course is required before discharge. Filings are made under penalty of perjury and are reviewed by a trustee, so completeness matters.
07
What a trustee examines
Trustees look at recent transfers, large payments to particular creditors, new borrowing shortly before filing, and whether the schedules are complete. None of this is hostile; it is the job. The practical implication is that anything unusual in your recent financial history should be raised with a lawyer before filing rather than discovered at the meeting of creditors.
08
Deciding whether it is the right tool
Bankruptcy is one option among several, alongside negotiation, hardship programs, and simply doing nothing while a limitation period runs. The Consumer Financial Protection Bureau publishes guidance on debt collection and on responding when a collector sues, which is useful background. The federal courts note plainly that their own materials are not a substitute for advice from a competent attorney.
FAQ
Frequently asked questions
Will bankruptcy stop a foreclosure?
The automatic stay generally stops collection actions on filing, which can affect a scheduled sale, and Chapter 13 in particular is designed to address mortgage arrears through a repayment plan. Whether it helps in a specific case depends on timing, the amount of arrears, and the ability to sustain payments. Because filing before a scheduled sale is very different from filing after it, this is a situation where speed matters.
Can I keep my car?
It depends on the loan, the equity, the exemptions available in your state, and the chapter. Secured debts require their own plan — continuing payments, restructuring through Chapter 13, or surrendering the property are the general options. This is a question with a real answer for your situation, and it is worth asking specifically.
Does bankruptcy clear tax debt?
Some tax debt can be addressed and some cannot; the federal courts list certain taxes among the debts a discharge does not cover. The analysis is technical and depends on the type of tax, its age, and the filing history. Do not assume either outcome without advice specific to the tax at issue.
How long does it stay on my credit report?
Credit reporting is governed by federal consumer reporting law and is separate from the bankruptcy case itself. The practical picture is more nuanced than the headline: many people considering bankruptcy already have significant derogatory history. Ask about the realistic before-and-after rather than the worst-case framing.
Official forms and preparation tools
Get organized before you file or ask for help.
Use the preparation aids to collect information. Always obtain legal forms from the court or agency that controls them.
inventoryDebt and creditor inventory
Builds the complete creditor picture a bankruptcy consultation needs, and surfaces the debts people most often forget.
Open checklist
How to use it
- Work from statements and letters rather than memory
- List every debt, including ones you intend to keep paying
- Include debts owed to family, friends, and former partners
- Note anything already in collection, judgment, or garnishment
- Flag any debt where someone else also signed
- Bring the completed list, not the underlying pile, to a consultation
Secured debts
Secured debts are treated differently because the creditor can pursue the property itself.
- Mortgage or deed of trust, with the servicer and any arrears
- Vehicle loans, with lender and payoff information
- Furniture, electronics, or equipment financing tied to the item
- Any loan where specific property was pledged
Unsecured debts
- Credit cards, with issuer and account balance
- Medical bills, including accounts already sent to collection
- Personal loans and lines of credit
- Payday, title, or short-term high-cost loans
- Utility and telecommunications balances
Debts that often get left off
Leaving a debt off a filing is a problem even when you intend to keep paying it.
- Money borrowed from family or friends
- Debts you co-signed for someone else
- Debts someone else co-signed for you
- Homeowner or condominium association assessments
- Overpayments a benefits agency says you owe
- Amounts owed to a former landlord
Debts with special treatment
The federal courts identify categories that a discharge does not cover. List these separately so they can be discussed specifically.
- Child support or spousal support obligations
- Tax debts, with the year and taxing authority
- Student loans, with servicer and loan type
- Criminal fines, restitution, or court costs
Collection activity
Anything with a date attached should be raised at the very start of a consultation.
- Lawsuits filed, with case number and court
- Judgments already entered
- Wage garnishments or account levies in progress
- Scheduled foreclosure or repossession dates
- Written validation notices received from collectors
This is preparation, not a filing — official schedules have their own required format
Completing it does not indicate that bankruptcy is appropriate for you
It does not determine which debts would be discharged, which is a legal analysis
It is not a substitute for the official schedules or their instructions
worksheetBankruptcy consultation worksheet
Turns an hour with a bankruptcy attorney into an assessment rather than a fact-gathering session.
Open checklist
How to use it
- Fill in what you can and mark what you could not find
- Bring the completed worksheet and your creditor inventory
- Write your questions down before the meeting
- Take notes on the answers while they are fresh
Your situation in one page
- What changed that made this urgent
- Total approximate debt, and the largest three debts
- Household income and how steady it is
- Anything with a date: sale, garnishment, hearing, deadline
Property you would want to keep
- Home, and whether payments are current
- Vehicles needed for work or caregiving
- Retirement accounts, with type and approximate balance
- Tools of a trade or business equipment
Recent financial history to disclose
Trustees examine this period. Raising it early is far better than being asked about it later.
- Property sold, transferred, or given away recently
- Large payments to a single creditor or to family
- Recent significant purchases or cash advances
- Any prior bankruptcy filing, anywhere, and when
- Money taken from retirement savings to pay debts
Questions to ask
- Based on my income and property, which chapter appears to fit, and why?
- Which exemptions apply in my state, and what would I keep?
- Are any of my debts likely to survive a discharge?
- Is there anything in my recent history a trustee will question?
- What are the alternatives, and why is filing better here?
- What does your fee include, and how are court and course fees handled?
- What happens to my house or car if I file?
Before you leave
- What is the very next step, and who takes it
- What documents you still need to produce
- What you should avoid doing between now and filing
- What the timeline looks like from here
Filling this in does not begin a case or preserve any deadline
It does not tell you which chapter fits, which requires an eligibility analysis
It is not legal advice and creates no attorney-client relationship
checklistBankruptcy document checklist
Lists the records a bankruptcy case is built from, so gathering happens before a deadline rather than during one.
Open checklist
How to use it
- Collect documents rather than summaries; the schedules run on figures
- Request anything missing early, since third parties are slow
- Keep a copy of everything you hand to anyone
- Note the date of each statement so nothing is stale at filing
Income
- Recent pay statements for everyone in the household
- Tax returns, including any business returns
- Benefit, pension, or support income statements
- Self-employment records and business bank statements
Property and value
- Deeds, mortgage statements, and property tax records
- Vehicle titles and loan statements
- Bank, retirement, and investment account statements
- Life insurance policies showing any cash value
Debts
- Statements for every credit card, loan, and medical account
- Collection letters and validation notices
- Lawsuit papers, judgments, and garnishment notices
- Payoff figures and arrears amounts on secured debts
Required course certificates
The U.S. Trustee Program approves providers and publishes searchable lists by state and judicial district. It does not endorse any particular provider.
- Pre-filing credit counseling certificate from an approved agency
- Debtor education certificate, which comes after filing
Gathering documents does not begin a case or stop any collection activity
Districts have their own local requirements this list does not cover
It does not replace the official forms or their instructions
Federal · Administrative Office of the U.S. CourtsB 101 — Voluntary Petition for Individuals Filing for Bankruptcy
The document that opens an individual bankruptcy case and identifies the debtor, the chapter being filed under, and basic case information.
Form guide
B 101 — Voluntary Petition for Individuals Filing for Bankruptcy
The document that opens an individual bankruptcy case and identifies the debtor, the chapter being filed under, and basic case information.
An individual, or married individuals filing together, who has decided with advice that filing is the right step. It is not a form to complete in order to find out whether filing is appropriate.
At the start of a case. Federal law requires credit counseling from an approved agency before an individual may be a debtor, subject to very limited exceptions, so that step generally comes first.
- Full legal name and any other names used in recent years
- Current address and the district where the case would be filed
- Social Security or taxpayer identification number
- Which chapter is being filed under, decided with advice
- The credit counseling certificate or the basis for an exception
- A complete picture of debts, property, income, and expenses for the schedules
What the sections ask for
Section explanations describe what a form is asking for in ordinary language. They are not instructions about what any individual should write, and they do not replace the official instructions published with the form.
Asks for legal names, other names used, and identifying numbers. Other names matter because creditors may hold accounts under a former or business name.
Asks which chapter you are filing under, whether you have filed before, and how you propose to pay the filing fee.
Asks whether you are a sole proprietor or hold business interests, which can change how a case is administered.
Asks about property posing an immediate health or safety concern, so the court can act quickly if needed.
Asks you to confirm the required pre-filing counseling was completed, or to state the basis for an exception.
The declaration is signed under penalty of perjury, and a non-attorney preparer who helped must also identify themselves.
Common mistakes
- Filing before completing the required pre-filing credit counseling
- Omitting former or business names creditors may have used
- Filing the petition without the schedules and statements the case requires
- Choosing a chapter without an eligibility analysis
- Overlooking the district's own local rules and required local forms
Last source check: 2026-08-20 · awaiting attorney review
Federal · Administrative Office of the U.S. CourtsB 103A — Application for Individuals to Pay the Filing Fee in Installments
Asks the court for permission to pay the bankruptcy filing fee over time rather than in full when the petition is filed.
Form guide
B 103A — Application for Individuals to Pay the Filing Fee in Installments
Asks the court for permission to pay the bankruptcy filing fee over time rather than in full when the petition is filed.
An individual filer who cannot pay the fee in full at filing but does not qualify for, or is not seeking, a waiver.
Filed with the petition.
- The current filing fee for the chapter being filed, from the official schedule
- A realistic proposed payment schedule
- Whether any payment has already been made to an attorney or petition preparer
What the sections ask for
Section explanations describe what a form is asking for in ordinary language. They are not instructions about what any individual should write, and they do not replace the official instructions published with the form.
Asks what amounts you propose to pay and when. Federal rule permits the court to authorize up to four installments.
Federal rule provides that a debtor may not pay an attorney or a petition preparer until the filing fee is paid in full.
Common mistakes
- Proposing a schedule that runs past what the rule permits
- Paying an attorney or preparer while installments remain outstanding
- Missing an installment, which can lead to dismissal
Last source check: 2026-08-20 · awaiting attorney review
Federal · Administrative Office of the U.S. CourtsB 103B — Application to Have the Chapter 7 Filing Fee Waived
Asks the court to waive the chapter 7 filing fee entirely.
Form guide
B 103B — Application to Have the Chapter 7 Filing Fee Waived
Asks the court to waive the chapter 7 filing fee entirely.
An individual filing under chapter 7 whose circumstances may meet the waiver standard. It is not available in chapter 13.
Filed with the chapter 7 petition.
- Household income and size
- Documentation supporting the income figures reported
- The schedules of income and expenses, since the court considers the whole picture
What the sections ask for
Section explanations describe what a form is asking for in ordinary language. They are not instructions about what any individual should write, and they do not replace the official instructions published with the form.
Asks about household size and income so the court can apply the waiver standard, which is tied to federal poverty guidelines.
Signed under penalty of perjury, like the rest of the filing.
Common mistakes
- Assuming a waiver is available in a chapter other than chapter 7
- Reporting income inconsistently with the schedules filed alongside
- Treating a waiver application as automatically granted
Last source check: 2026-08-20 · awaiting attorney review
Federal · Administrative Office of the U.S. CourtsB 106A/B through B 106J — Schedules for Individuals: Schedule A/B Property; Schedule C The Property You Claim as Exempt; Schedule D Creditors Who Hold Claims Secured By Property; Schedule E/F Creditors Who Have Unsecured Claims; Schedule G Executory Contracts and Unexpired Leases; Schedule H Your Codebtors; Schedule I Your Income; Schedule J Your Expenses
The sworn inventory of what an individual debtor owns, owes, earns, and spends, together with the exemptions claimed.
Form guide
B 106A/B through B 106J — Schedules for Individuals: Schedule A/B Property; Schedule C The Property You Claim as Exempt; Schedule D Creditors Who Hold Claims Secured By Property; Schedule E/F Creditors Who Have Unsecured Claims; Schedule G Executory Contracts and Unexpired Leases; Schedule H Your Codebtors; Schedule I Your Income; Schedule J Your Expenses
The sworn inventory of what an individual debtor owns, owes, earns, and spends, together with the exemptions claimed.
Every individual debtor. The schedules are where a case is actually made or broken.
Filed with the petition or by the deadline the rules and the district set after filing.
- Every creditor, including debts owed to family and debts you intend to keep paying
- Account statements for bank, retirement, and investment accounts
- Deeds, titles, and current valuations for property
- Recent pay records and a realistic monthly expense picture
- Records of property transferred or sold recently
- Which exemption scheme applies where you live
What the sections ask for
Section explanations describe what a form is asking for in ordinary language. They are not instructions about what any individual should write, and they do not replace the official instructions published with the form.
A complete list of everything owned, not only significant items.
Where you claim the protections that decide what you keep. Which exemptions are available depends on state law.
Separates debts tied to specific property from unsecured debts, and identifies priority claims within the unsecured group.
The monthly picture of what comes in and goes out, which drives feasibility in a repayment case.
Common mistakes
- Leaving a creditor off, including a relative or a debt you plan to keep paying
- Guessing at property values instead of documenting them
- Claiming exemptions under the wrong scheme for the state
- Omitting recent transfers a trustee will examine
- Inconsistencies between the schedules and the income and means test forms
Last source check: 2026-08-20 · awaiting attorney review
Federal · Administrative Office of the U.S. CourtsB 122A-1 and B 122A-2 — Chapter 7 Statement of Your Current Monthly Income; Chapter 7 Means Test Calculation
Reports current monthly income and, where required, works through the means test calculation that compares income to the applicable state median and applies allowed expense figures.
Form guide
B 122A-1 and B 122A-2 — Chapter 7 Statement of Your Current Monthly Income; Chapter 7 Means Test Calculation
Reports current monthly income and, where required, works through the means test calculation that compares income to the applicable state median and applies allowed expense figures.
Individual chapter 7 filers. Chapter 13 filers use the parallel B 122C forms.
Filed with the petition or by the deadline set after filing.
- Income for every source over the defined look-back period
- Household size as the form defines it
- Documentation supporting each income figure
- Secured debt payment information where the calculation reaches it
What the sections ask for
Section explanations describe what a form is asking for in ordinary language. They are not instructions about what any individual should write, and they do not replace the official instructions published with the form.
A defined average over a look-back period, which is not the same as what you earn this month.
Compares your figure to the median for a household of your size in your state; the result determines whether the fuller calculation is required.
Applies allowed expense standards and other deductions to determine whether a presumption of abuse arises.
Common mistakes
- Using current earnings instead of the defined look-back average
- Counting household size differently than the form requires
- Treating the median comparison as the end of the analysis
- Figures that contradict Schedules I and J
Last source check: 2026-08-20 · awaiting attorney review
Your next useful step
Keep moving with a purpose.
You are here: Understand what happened
Continue preparing
Know what to gather before you act.
Lawyer in Town publishes general legal information for consumers. It is not legal advice, it does not create an attorney-client relationship, and it cannot account for the facts of any individual situation. Laws, court procedures, filing deadlines, and outcomes differ by state and by court, and they change over time. Confirm anything that affects a decision with a lawyer licensed in the relevant jurisdiction.
Bankruptcy is federal law, and this article follows the federal courts' published overview. Exemptions depend on state law, local district rules vary, and collection procedures such as garnishment and foreclosure are governed by state law.