Chapter 7 Bankruptcy: What to Know Before You File

Will I lose my house, car, tax refund or retirement?

What you can keep depends on the property, the loans against it and the protection allowed by law. Ask for a check of your home, car, accounts and expected tax refund before filing. Do not assume every asset is protected or that you must lose everything.

Exemptions are rules that protect property. States can use different rules, and your recent residence history may affect which law applies. Give the lawyer the dates and places where you lived. A list for a different state does not answer how much of your own property is protected.

For a home or car, gather a value estimate and the current loan balance. Equity is the value left after subtracting the loan. Ask whether that amount is protected and whether keeping the property requires more steps. Protection from the trustee is separate from the lender’s rights under its loan.

The law protects certain qualifying retirement funds, with conditions and limits. Bring the account type and statements for review. Ask before cashing out a retirement account to pay bills or moving money between accounts. Also disclose cash, expected refunds and property held with another person.

Do I qualify with my income?

The income test looks at defined income and allowed expenses, not just your take-home pay today. The rules compare income with data for your state and family size. Above that level does not by itself answer every Chapter 7 question.

The test generally uses income from the six calendar months before filing, with legal exclusions. Bring pay records and information about other income rather than using one paycheck alone. If further calculations are needed, the forms apply allowed expenses and debt payments. Ask how changes in work or household facts affect your situation.

Use DOJ data for the date the case is filed. Its revised income data took effect for filings on April 1, 2026. Revised expense standards took effect on July 15, 2026. Those are different updates; a number copied from an old table may be the wrong one for your filing.

Tell the lawyer about any earlier bankruptcy and what order was entered. Income is only part of the review. Credit counseling, filing history and the types of debt also matter. Do not read a calculator result as a promise that the court will grant a discharge.

How long does it take, and what are the steps?

Timing depends on required tasks, notices and any dispute in the case. Before filing, most individuals must complete approved credit counseling. After filing, there is a trustee meeting and a separate education course before a discharge can be entered.

The required pre-filing counseling generally must occur within the 180 days before filing, with limited exceptions. A later education course is different from that first briefing. Ask how each completion will be recorded with the court. Do not assume taking one course satisfies both duties.

The trustee meeting is often called the 341 meeting. You answer questions under oath about the forms and your finances. Follow the notice for the date, location or remote access and records to provide. Ask for help if you cannot attend or a record is missing.

The courts describe discharge in many cases as occurring 60 to 90 days after the first date set for that meeting. Objections or other issues can change the timing. A discharge order and the end of all work in a case are different matters. Ask what remains to be done instead of assuming a promised finish date.

What should I gather before I file?

Gather income records, bills, tax records, account statements and any collection notices. List what you own and all the debts you know about. Ask before giving away property, repaying family or taking on new debt to prepare for filing.

Keep loan statements for your house and car and documents about any earlier bankruptcy. Include property or accounts held jointly and any expected refund. If a record is incomplete, explain the gap rather than inventing a balance. The court requires truthful information, and hiding assets can put discharge at risk.

Tell the lawyer about recent gifts, transfers and payments to relatives. The trustee can review some earlier transactions. Ask before moving property to another person’s name or running up a card because you expect bankruptcy to clear it. The law can treat some new debts differently from older bills.

Which debts can remain, and are there urgent dates?

Some debts remain after Chapter 7, and some require a separate legal decision. Child support, certain taxes and many student loans need particular attention. Bring each debt and any court notice for review rather than assuming every balance will go away.

For education debts covered by the law, an undue-hardship decision is needed for discharge. A claim of fraud can also involve a separate court challenge. Debt labels alone may not decide the result. Ask which rules and procedures apply to the actual obligation.

A collection suit, sale notice or court order may have its own date to act. Do not wait for a general bankruptcy review to assume that deadline has stopped. After filing, follow the court notices for records, meetings, courses and payments. Earlier cases may also affect when another discharge can be available.