In a Chapter 7 bankruptcy, you can stop paying most creditors the moment your petition is filed with the court. Filing triggers the automatic stay, a federal injunction that immediately blocks collection on the debts your case will wipe out. The catch is that not every debt gets wiped out, and stopping payments on the wrong ones—or at the wrong time—can cost you property, damage a co-signer, or hand a creditor grounds to come after you anyway.
Filing Day Is the Trigger
The automatic stay takes effect the instant your petition reaches the court clerk. Under federal law, filing operates as an immediate injunction barring creditors from collecting debts, filing or continuing lawsuits, garnishing wages, repossessing vehicles, or foreclosing on homes.1Office of the Law Revision Counsel. 11 USC 362 – Automatic Stay No hearing is needed. No creditor has to agree.
Before that filing date, none of this protection exists. Creditors can still call, sue, and garnish. After that filing date, the stay runs until your discharge or dismissal—about three to four months in a typical no-asset case.
Two situations weaken the stay. If a prior bankruptcy case was dismissed within the past year, the stay may last only 30 days or may not take effect at all. And if you received a Chapter 7 discharge within the past eight years, you can’t get another one at all.2Office of the Law Revision Counsel. 11 USC 727 – Discharge
Debts You Can Stop Paying on Filing Day
Once you’ve filed, you can stop paying the unsecured debts that will be discharged in your case. Unsecured means the debt isn’t tied to any collateral. That covers:
- Credit card balances
- Medical bills
- Personal loans and payday loans
- Past-due utility charges from before filing
- Collection accounts
- Deficiency balances left over after a repossession or foreclosure
- Most civil court judgments
Eliminating these obligations is the whole point of Chapter 7.3United States Courts. Discharge in Bankruptcy – Bankruptcy Basics Continuing to pay them after you file wastes money you’ll need for living expenses and for debts that survive the case.
Debts You Should Keep Paying
Federal law carves out several categories of debt that survive a Chapter 7 discharge. The automatic stay pauses collection on them while your case is open, but the balance will be waiting for you when the case closes. Interest and penalties may keep accruing in the meantime. Keeping current on these is almost always the smarter move.
- Child support and alimony. Domestic support obligations are the highest priority in bankruptcy and cannot be discharged.4Office of the Law Revision Counsel. 11 USC 523 – Exceptions to Discharge
- Most student loans. These aren’t automatically wiped out. A borrower can seek discharge by filing an adversary proceeding and proving undue hardship, but the process still requires a lawsuit inside your bankruptcy case.5U.S. Department of Education FSA Partners. Undue Hardship Discharge of Title IV Loans in Bankruptcy Adversary Proceedings
- Recent income taxes. Taxes are generally non-dischargeable if the return was due within the past three years, if a late return was filed within the past two years, or if the tax was assessed within 240 days before filing.6Office of the Law Revision Counsel. 11 USC 507 – Priorities
- Debts from fraud or intentional harm. Money obtained through false pretenses, debts from willful injury, and personal injury debts caused by drunk driving all survive.4Office of the Law Revision Counsel. 11 USC 523 – Exceptions to Discharge
- Government fines and criminal restitution. Most penalties owed to government entities and court-ordered restitution cannot be discharged.
Secured Debts: Don’t Stop If You Want to Keep the Property
Car loans, mortgages, and other secured debts follow different rules. The automatic stay temporarily stops repossession and foreclosure, but it doesn’t erase the creditor’s lien on the property. If you stop paying, the lender can ask the court to lift the stay and take the collateral.
Within 30 days of filing, or before your meeting of creditors if that comes first, you must file a statement of intention telling the court and each secured creditor what you plan to do with the collateral.7Office of the Law Revision Counsel. 11 USC 521 – Debtor’s Duties Three options:
- Reaffirm. You sign a voluntary agreement to keep paying, and you keep the property. The debt survives your discharge. A judge may reject the agreement if the payments look unaffordable.8United States Courts. Instructions for Reaffirmation Documents
- Redeem. You pay the creditor the property’s current market value in a single lump sum, regardless of the remaining balance. Redemption applies only to tangible personal property for household use, not real estate.9Office of the Law Revision Counsel. 11 USC 722 – Redemption
- Surrender. You return the property and walk away. Any remaining loan balance gets discharged with your other unsecured debts.
The practical rule is simple. If you want to keep the house or the car, keep making the payments after filing. Missing them gives the lender grounds to move against the collateral even while the case is open.
Co-Signed Debts Get You Only
The automatic stay in Chapter 7 shields the person who filed. There is no equivalent protection for co-signers, guarantors, or joint account holders in Chapter 7 (a co-debtor stay exists in Chapter 13 cases, but not here).10Office of the Law Revision Counsel. 11 USC 1301 – Stay of Action Against Codebtor
The moment you file and stop paying, the creditor can turn to your co-signer for the full balance. If a parent co-signed a car loan or a friend guaranteed a personal loan, filing shifts the collection burden squarely onto them. Have that conversation before you file, not after they receive a demand letter.
Utilities: Keep Current Bills Paid, Post a Deposit Within 20 Days
Filing Chapter 7 doesn’t cut off your electricity, water, or gas. A utility company can’t shut off service solely because you filed for bankruptcy or because you owe money from before the filing date.11Office of the Law Revision Counsel. 11 USC 366 – Utility Service
There is a catch. You have 20 days from your filing date to give the utility adequate assurance of future payment, usually a deposit. If you don’t, the utility can discontinue service. The deposit amount is negotiable, and the bankruptcy court can reduce it if the utility demands an unreasonable sum. Any pre-filing arrears get treated as unsecured debt and can be discharged. Bills that come due after filing are your responsibility to pay on time.
The Gap Between Deciding and Filing
The stretch between deciding to file and actually filing is legally sensitive. Because the automatic stay doesn’t exist until the petition is submitted, creditors can still call, sue, garnish, and repossess during that window.
Some people stop paying dischargeable debts a few months before filing to save up for the filing fee and attorney costs. That’s common and not inherently problematic; inability to pay is presumably why the case is happening. What gets filers in trouble is the opposite move: running up new debt right before filing.
Federal law creates two presumptions of fraud for late spending. Luxury purchases exceeding $900 from a single creditor within 90 days of filing are presumed non-dischargeable. Cash advances exceeding $1,250 within 70 days of filing carry the same presumption. Both thresholds are effective through March 2028.4Office of the Law Revision Counsel. 11 USC 523 – Exceptions to Discharge “Luxury” in bankruptcy means anything not reasonably necessary for support. Groceries and medicine are fine; a new television or vacation charges raise red flags.
The presumption can be rebutted, but the burden shifts to you to prove you didn’t intend to defraud the creditor. The simpler approach is to stop taking on new debt once you’ve decided to file.
If a Creditor Keeps Calling After You File
The court sends notice to your listed creditors, but it can take several days to arrive, and debt buyers who’ve purchased old accounts sometimes don’t update their systems promptly. If a creditor contacts you after filing, tell them you’ve filed for bankruptcy and give them your case number, filing date, and your attorney’s contact information. That usually ends it.
A creditor who knowingly continues collection after learning about your bankruptcy is violating the automatic stay. Federal law lets you recover actual damages, including attorney fees and costs, for any willful violation, and courts can award punitive damages in egregious cases.1Office of the Law Revision Counsel. 11 USC 362 – Automatic Stay Save voicemails, letters, and screenshots, and pass them to your attorney or report the conduct to the court.