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What is the filing process for Chapter 7 or 13 bankruptcy?

Whether you are facing overwhelming credit card or medical debt or worried about foreclosure or repossession, filing for bankruptcy may be the lifeline you need to get your finances back on track. 

Depending on your specific circumstances, you may choose to file for either Chapter 7 or Chapter 13 bankruptcy. 

Under Chapter 7 bankruptcy, you may be able to eliminate many types of debt through liquidation, or selling off certain assets. Chapter 13 bankruptcy may allow you to keep non-essential assets while lowering your monthly obligation by creating a 3-to-5-year repayment plan. However, the basic process for both types of bankruptcy is similar. 

1. File your petition 

Filing your petition with the court is the first step in the bankruptcy process. In addition to providing documentation of your monthly income, expenses and assets, your petition should include information about current creditors, debts, contracts and other financial liabilities. 

2. Receive an automatic stay

If your petition shows you are eligible for bankruptcy, the court orders an “automatic stay” on debts. This order prohibits creditors from contacting you or taking collection actions against you and may prevent foreclosure proceedings. 

3. Meet with your trustee and creditors

After receiving your petition, the court appoints a bankruptcy trustee to oversee your case and assist with either liquidating assets (Chapter 7) or creating a payment plan (Chapter 13). Then you, your trustee, your creditors and your attorney will meet to determine how to handle the specifics of your case. 

4. Complete credit counseling

Whether you file for Chapter 7 or 13, you will have to complete a money management course before the court discharges or restructures your debt. These classes aim to help you plan your budget, manage debts and make smart choices for your new financial future. 


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