Filing bankruptcy is a federal court process that can discharge most unsecured debts, but it requires strict eligibility and paperwork. You must first complete credit counseling from a U.S. Trustee-approved agency within 180 days before filing. Then you file a petition, schedules, and means test forms with your local bankruptcy court. The two main types for individuals are Chapter 7, which liquidates non-exempt assets to wipe out debt, and Chapter 13, which sets up a 3-5 year repayment plan. Filing fees are around $338 for Chapter 7 and $313 for Chapter 13, though you can request an installment plan.
If you searched this, you likely face overwhelming unsecured debt—credit cards, medical bills, personal loans—and may have fallen behind on payments, facing wage garnishment, lawsuits, or collection calls. The hardship is serious, often tied to job loss, medical crisis, or divorce. Risk level is high: bankruptcy stays on your credit report for 7-10 years, can affect future loans, and may not discharge student loans, recent taxes, or child support. A professional review is useful if you have significant assets, a co-signed debt, or if you’re unsure whether you qualify under the means test.
A reasonable path forward starts by gathering key documents: last two years of tax returns, pay stubs for six months, a list of all debts and creditors, and a detailed monthly budget. Then compare options. Chapter 7 offers a faster fresh start but requires passing a means test based on your state’s median income. Chapter 13 works if you have steady income and want to keep non-exempt property like a house or car. Both require full disclosure of all assets and debts. Debt relief availability depends on your state’s exemption laws, the type of debt, your specific hardship, whether accounts are current or charged off, and partner criteria for any program.
Before you talk to a lawyer or trustee, use the private assessment on the DebtSense AI homepage. It gives you a preliminary, no-obligation review of your situation based on the numbers you enter. This helps you understand your options without pressure.
Debt question guide