When you declare bankruptcy, you file a petition in federal court that immediately stops most collection activity against you, hands your finances over to a court-appointed trustee, and — months or years later — ends with a discharge order that erases your personal liability for qualifying debts. A Chapter 7 case usually runs four to six months from filing to discharge. A Chapter 13 case runs three to five years because you repay creditors on a court-approved plan before the discharge is entered.
The Automatic Stay Starts the Same Day You File
The moment your petition reaches the court, a federal injunction called the automatic stay takes effect. No separate order is needed.1Office of the Law Revision Counsel. 11 USC 362 – Automatic Stay Creditors have to stop calling, writing, and emailing about your debts. Pending lawsuits pause. Foreclosure sales are postponed. Wage garnishments for consumer debts must stop.
The stay is powerful but it isn’t total. Criminal proceedings against you keep going. Family law matters — establishing or modifying child support, determining paternity, addressing domestic violence — are not stopped. The government can still audit your taxes and issue deficiency notices. Collection of domestic support obligations from property that isn’t part of the bankruptcy estate also continues.2Office of the Law Revision Counsel. 11 US Code 362 – Automatic Stay
If a creditor knowingly ignores the stay, you can recover actual damages, court costs, and attorney fees. Punitive damages are available in some cases.1Office of the Law Revision Counsel. 11 USC 362 – Automatic Stay
A Trustee Takes Over Your Case
Shortly after you file, the U.S. Trustee Program — a division of the Department of Justice — assigns a private trustee to your case.3U.S. Department of Justice. About the United States Trustee Program The trustee is not a government employee, but works alongside the U.S. Trustee to keep the process honest.4U.S. Department of Justice. Private Trustee Information
In Chapter 7, the trustee’s job is to identify any non-exempt property, sell it, and use the proceeds to pay creditors.5Office of the Law Revision Counsel. 11 USC 704 – Duties of Trustee In Chapter 13, the trustee collects your monthly plan payments and distributes them. Either way, the trustee will review your tax returns, bank statements, and paperwork for accuracy.
The Meeting of Creditors
Between 21 and 40 days after you file, you attend a proceeding called the meeting of creditors, sometimes called the 341 meeting. The trustee runs it, not a judge. You testify under oath and bring identification — typically a government-issued photo ID and your Social Security card. Creditors are notified and may attend, but in ordinary consumer cases they rarely show up. If your paperwork is in order, the meeting is often over in 10 to 15 minutes. If the trustee wants more information, the meeting can be continued to another date.
What Happens to Your Property
Chapter 7: Liquidation, but Most Cases Are “No-Asset”
In a Chapter 7 case, federal law lets you protect a set amount of equity in different categories of property through exemptions. For cases filed between April 2025 and March 2028, the federal homestead exemption protects up to $31,575 of equity in your primary residence, the motor vehicle exemption covers up to $5,025 of equity in one vehicle, and a wildcard exemption of $1,675 (plus up to $15,800 of any unused homestead amount) can be applied to any property.6Federal Register. Adjustment of Certain Dollar Amounts Applicable to Bankruptcy Cases Many states have their own exemption systems, and some require you to use the state list rather than the federal one.
When everything you own fits within the applicable exemptions, the trustee reports the case as a “no-asset” case and creditors receive nothing from the estate. Most consumer Chapter 7 cases end that way.
Chapter 13: You Keep Your Property and Repay on a Plan
Chapter 13 works differently. You keep your assets and repay creditors through a court-approved plan lasting three to five years. If your income is below your state’s median, the plan runs three years unless the court approves longer; if your income is above the median, it generally runs five.
The plan sorts your debts into three buckets. Priority debts, like recent taxes and domestic support, must be paid in full. Secured debts like a mortgage or car loan are paid according to the plan’s terms so you can keep the collateral. General unsecured debts — credit cards, medical bills — receive whatever your remaining disposable income can cover, which is often only a fraction of what you owe. If you miss payments, the court can dismiss the case, which lifts the automatic stay and leaves you exposed to collection again.
Debts That Bankruptcy Does Not Erase
Not every debt goes away. Federal law carves out categories that survive a discharge regardless of which chapter you file.7Office of the Law Revision Counsel. 11 US Code 523 – Exceptions to Discharge The most common:
- Child support and alimony.
- Government-backed and qualified private student loans, unless you prove in a separate proceeding that repayment would be an undue hardship — a difficult standard to meet.
- Income taxes if the return was due within three years before you filed, or if the return was filed late and less than two years before the petition date. Taxes tied to fraud or willful evasion are never dischargeable.8Internal Revenue Service. Publication 908, Bankruptcy Tax Guide
- Criminal fines and restitution.
- Consumer debts over $900 for luxury goods incurred within 90 days before filing, and cash advances over $1,250 taken within 70 days before filing, which are presumed nondischargeable.7Office of the Law Revision Counsel. 11 US Code 523 – Exceptions to Discharge
- Debts obtained through fraud, false pretenses, or willful and malicious injury to another person or their property.
Chapter 13 offers a slightly broader discharge than Chapter 7 in a few categories, but domestic support, student loans, and criminal obligations survive under both.9Office of the Law Revision Counsel. 11 USC 1328 – Discharge
The Discharge Order Ends the Case
The discharge is the court order that formally eliminates your personal liability for qualifying debts. Once it’s entered, creditors are permanently barred from trying to collect on those debts — no calls, no letters, no lawsuits.10Office of the Law Revision Counsel. 11 USC 727 – Discharge
In a Chapter 7 case, the discharge typically arrives four to six months after filing. The timing depends on the 60-day objection window that follows the meeting of creditors; if no one objects, the court issues the discharge shortly after that window closes. Chapter 13 discharges come only after you complete every payment under your plan.9Office of the Law Revision Counsel. 11 USC 1328 – Discharge The court sends a copy of the order to every creditor and the trustee, and the case is closed.
How It Affects Your Credit
A bankruptcy filing can stay on your credit report for up to 10 years from the date the order is entered.11Consumer Financial Protection Bureau. How Long Does a Bankruptcy Appear on Credit Reports As a practical matter, the major credit bureaus often remove a completed Chapter 13 after seven years, though the statute allows up to ten.
During that period, the filing is visible to lenders, landlords, and employers who pull your credit report. The hit to your score is sharpest in the first year or two and eases as you rebuild your history. Many people who receive a discharge qualify for secured credit cards and small loans relatively soon after the case closes, though rates tend to be higher than average until the bankruptcy ages off the report.
Steps You Have to Take Before and After Filing
You cannot file a petition unless you first complete a credit counseling session with a nonprofit agency approved by the U.S. Trustee Program. It must happen within 180 days before you file, and it can be done by phone, online, or in person.12Office of the Law Revision Counsel. 11 US Code 109 – Who May Be a Debtor The agency issues a certificate that you file with your petition. Skip this step and the court can dismiss your case.
A second course — personal financial management — is required after you file but before the court will grant your discharge. In Chapter 7, you generally need to complete it and file proof within 45 days after your meeting of creditors. In Chapter 13, you have to finish it before your final plan payment. No course, no discharge.
If you want to file Chapter 7, you also have to pass the means test, which compares your household income over the six months before filing to the median income for your household size in your state. Below the median, you pass automatically. Above it, the court applies a second calculation to decide whether you have enough disposable income to repay a meaningful share of your debts; if you do, the court presumes Chapter 7 would be abusive and you would typically need to file Chapter 13 instead.13Office of the Law Revision Counsel. 11 US Code 707 – Dismissal of a Case or Conversion
What It Costs
The court filing fee for Chapter 7 is $338, which covers the filing fee, an administrative fee, and a trustee surcharge. Chapter 13 is $313. If you cannot pay up front, you can ask the court to let you pay in installments, or, in Chapter 7, to waive the fee entirely based on your income.
Attorney fees vary by location and case complexity. Chapter 7 fees commonly run from roughly $600 to $3,000. Chapter 13 fees are usually higher, around $3,000 to $5,000, because the attorney’s work runs the length of the plan. Many Chapter 13 lawyers fold their fees into the plan itself so you pay over time. The two required courses together run about $20 to $100.