Chapter 7 Bankruptcy Guide 2025

Chapter 7 bankruptcy liquidates non-exempt assets to pay creditors and discharges remaining unsecured debt in 3–6 months. The means test requires your income to be below your state's median (or pass a formula test). Exempt property varies by state — most states protect your home (up to limits), car (up to $4,000), retirement accounts, and basic household items. The bankruptcy stays on your credit report for 10 years, but many people see credit scores improve within 12–18 months as the debt burden is gone. Filing fee: $338. You can refile Chapter 7 after 8 years.