Chapter 7
Chapter 7 Questions People Ask Most
Chapter 7 is the liquidation chapter of the federal Bankruptcy Code, used by individuals who want a discharge of qualifying debts. A trustee reviews your assets, and non-exempt property may be sold to pay creditors. Filing generally costs $245 in filing fees, $78 administrative, and $15 trustee surcharge. Some debts are never discharged.
Key points
- Chapter 7 is described by the courts as "liquidation": a trustee may sell non-exempt property and distribute the cash to creditors (Bankr. M.D. La.).
- The court "shall grant the debtor a discharge" unless one of the specific grounds listed in 11 U.S.C. § 727(a) applies.
- Federal filing costs are $245 (28 U.S.C. § 1930(a)(1)(A)), plus a $78 administrative fee and a $15 trustee surcharge.
- A Chapter 7 case can be dismissed for cause, or as an abuse under 11 U.S.C. § 707(b), if the debtor's debts are primarily consumer debts.
- Discharge relieves personal liability but does not remove valid liens that existed before filing (Bankr. N.D. Iowa).
If you are researching Chapter 7, you probably have a short list of urgent questions and very little patience for legalese. This page answers the ones people ask most, grounded in the federal Bankruptcy Code and official bankruptcy court guidance. Nothing here is legal advice, and none of it can tell you what will happen in your case.
How does Chapter 7 actually work, start to finish?
Court guidance describes Chapter 7 as "liquidation": the debtor's estate is liquidated under the rules of the Bankruptcy Code, and non-exempt property is sold for cash by a case trustee and distributed to creditors (Bankr. M.D. La.). One district's published flowchart for debtors without an attorney sets out the ordinary sequence: complete the credit counseling course before filing, file the petition and pay the filing fee, file the schedules and statements, give required documents to the trustee seven days before the meeting of creditors, attend the meeting, complete the financial management course, and then a discharge order is entered and the case is closed (Bankr. D. Minn.). That district notes it is a flowchart of a typical case and that individual cases may differ. One court says plainly that it cannot predict when any particular person will receive a discharge, though in a typical Chapter 7 case it could be four to six months after the paperwork is filed (Bankr. D. Md.).
- Credit counseling certificate first, before the petition is filed
- Petition, fee, creditor list, schedules and statements
- Documents to the trustee, then the meeting of creditors
- Financial management course certificate
- Discharge order, then case closed
What changes the answer in a Chapter 7 case?
Several facts change the shape of a case more than anything else. The first is income. Court instructions explain that if your debts are primarily consumer debts, the court can dismiss your Chapter 7 case if it finds you have enough income to repay creditors a certain amount, and that Official Form 122A-1 compares your current monthly income to the median income that applies in your state (Bankr. S.D. Iowa). Households below that published median do not complete the second means-test form; households above it do. The second is property. The trustee may sell your property to pay debts, subject to your right to exempt it, and exemptions are not automatic: you must list the property on Schedule C or the trustee may sell it and pay the proceeds to creditors (Bankr. S.D. Iowa). The third is the nature of the debts themselves, since some categories are excepted from discharge under 11 U.S.C. § 523.
- Whether your debts are primarily consumer debts
- How your current monthly income compares to your state's published median
- Whether you have non-exempt equity in property
- Whether your largest debts fall in a § 523 exception category
- Whether you have filed a prior bankruptcy case
What does federal law say about who can file and who gets a discharge?
Eligibility starts with 11 U.S.C. § 109, which provides that only a person who resides or has a domicile, a place of business, or property in the United States may be a debtor under title 11, and that a person may be a debtor under Chapter 7 only if that person is not a railroad, an insurance company, a bank or similar institution, or certain foreign financial institutions. Discharge is governed by 11 U.S.C. § 727, which states the court "shall grant the debtor a discharge, unless" one of the enumerated grounds applies. Those grounds include that the debtor is not an individual, that the debtor transferred, removed, destroyed or concealed property with intent to hinder, delay or defraud a creditor within one year before filing, that the debtor concealed or failed to keep records from which financial condition might be ascertained, that the debtor knowingly and fraudulently made a false oath, and that the debtor failed to explain satisfactorily any loss of assets.
| Provision | What it governs | Core language |
|---|---|---|
| 11 U.S.C. § 109 | Who may be a debtor | Only a person residing, domiciled, doing business, or holding property in the United States |
| 11 U.S.C. § 727 | Whether a discharge is granted | The court shall grant a discharge unless a listed ground applies |
| 11 U.S.C. § 707 | Dismissal or conversion | Dismissal for cause, or for abuse where debts are primarily consumer debts |
| 11 U.S.C. § 541 | What becomes property of the estate | Broad: once the estate is created, no interests in property of the estate remain in the debtor |
Where do state and local rules change things?
The Bankruptcy Code is federal, but two things vary by where you live. Exemptions, which decide what property you can keep, depend on state law, and the median income figure your current monthly income is compared against is published by state and household size (Bankr. S.D. Iowa). We publish those state-specific figures on the state pages rather than restating them here. Local practice also varies. Districts publish their own local bankruptcy rules and procedures, and one district's FAQ page states plainly that its answers apply only to cases assigned to that judge and that other judges of the district may follow a different procedure (Bankr. N.D. Ind.). Fees for routine steps differ too: one district charges $32 to add creditors after filing (Bankr. D. Md.). Check your own district's rules and forms before relying on anything general.
- Exemption amounts are set by state law and published on our state pages
- Median income comparison is by state and household size
- Local bankruptcy rules and filing procedures differ by district
- Some procedures differ even between judges in the same district
What does a discharge actually look like in practice?
A discharge releases a debtor from personal liability for dischargeable debts incurred before filing, and prevents those creditors from taking action to collect, including telephone calls, letters and personal contact about the debt (Bankr. M.D. Ala.). What it does not do matters just as much. The discharge order only relieves the debtor of the personal obligation to pay; valid liens against property that existed before filing generally pass through the bankruptcy unaffected, though certain liens may be avoided (Bankr. N.D. Iowa). Court guidance also warns that discharge does not prevent secured creditors from seizing collateral if payments are not kept up (Bankr. M.D. Ala.). Under both Chapter 7 and Chapter 13, you must keep paying debts secured by property if you want to keep the property, which most commonly means continuing regular mortgage payments and maintaining insurance (U.S. Bankr. Ct. D. Ariz.).
- Discharged: personal liability for qualifying pre-filing debts
- Not discharged: most taxes, most student loans, domestic support and property settlement obligations, most fines and criminal restitution (Bankr. E.D. La.)
- Not removed: valid pre-existing liens such as a mortgage
- Not stopped: a secured creditor's rights in collateral if payments lapse
What documents and information does a Chapter 7 filing involve?
A lot, and the courts are specific about it. One district lists what must accompany the petition: the filing fee or an application to pay in installments or have it waived, Form 101 (Voluntary Petition for Individuals), a mailing matrix listing all creditors, Form 121 (Statement of Social Security Number), and the certificate of credit counseling (Bankr. N.D. Iowa). Within 14 days come the schedules and statements: Form 106Sum, Schedules A/B, C, D, E/F, G, H, I and J, the declaration about the schedules, Form 107 (Statement of Financial Affairs), and Form 122A-1 for current monthly income. Copies of pay stubs or other evidence of payment received from an employer within 60 days before filing are also required, and documents must reach the trustee seven days before the section 341 meeting. Everything is submitted under penalty of perjury, so accuracy is not optional; corrections require a signed amendment (Bankr. N.D. Iowa).
| Item | Amount | Authority |
|---|---|---|
| Filing fee | $245 | 28 U.S.C. § 1930(a)(1)(A), (f)(1) |
| Administrative fee | $78 | Bankruptcy Court Miscellaneous Fee Schedule, Item 8 |
| Trustee surcharge | $15 | Bankruptcy Court Miscellaneous Fee Schedule, Item 9 |
What should you ask a bankruptcy lawyer?
Court guidance is unusually direct on this point. Official Form 2010 tells individual filers: "You should have an attorney review your decision to file for bankruptcy and the choice of chapter" (Bankr. E.D. La.). Clerk's offices are prohibited by statute from giving legal advice or helping prepare forms (Bankr. W.D. Ky.), and one court notes that while individuals may file without a lawyer, it recommends consulting one because bankruptcy law can be complicated and may have long-term financial consequences (Bankr. M.D. La.). Bring specifics. Ask how your income compares to the median that applies to your household, which of your assets have non-exempt equity, whether any of your largest debts fall within a § 523 exception, and whether a reaffirmation agreement is being proposed. On that last point, one court advises consulting counsel before reaffirming, because a reaffirmation takes away some of the effectiveness of your discharge (Bankr. M.D. Ala.).
- How does my income compare to the applicable median for my household size?
- Which of my assets have equity a trustee could reach?
- Are any of my main debts likely to fall under a § 523 exception?
- Should I reaffirm any secured debt, and what do I give up if I do?
- What does my district require, and how long do cases typically take here?
Frequently asked questions
- How much does it cost to file Chapter 7?
- The federal cost is $245 as the statutory filing fee (28 U.S.C. § 1930(a)(1)(A), (f)(1)), a $78 administrative fee, and a $15 trustee surcharge. Courts publish these together as a total. Some courts accept only cash or money orders from debtors, and an individual unable to pay in full may apply to pay in installments or, in some circumstances, ask the court to waive the fee.
- Do I need a lawyer to file Chapter 7?
- Individuals may file without a lawyer, though courts commonly recommend against it. Corporations, partnerships and trusts must hire an attorney (Bankr. M.D. La.). Official Form 2010 says you should have an attorney review your decision to file and your choice of chapter. Clerk's office staff are prohibited by law from giving legal advice or helping you complete forms.
- How long does a Chapter 7 case take?
- It varies, and no court will predict your case. One district states that in a typical Chapter 7 case a discharge could come four to six months after the bankruptcy paperwork is filed (Bankr. D. Md.). Another notes the meeting of creditors is generally held 21 to 60 days after filing (Bankr. W.D. Ky.). Missed deadlines and unresolved trustee questions extend the timeline.
- Are all my debts wiped out in Chapter 7?
- No. Section 523(a) of the Bankruptcy Code excepts various categories of debt from discharge. Court guidance lists most taxes, most student loans, domestic support and property settlement obligations, most fines, penalties, forfeitures and criminal restitution, and debts not listed in your papers. Debts arising from fraud, theft, intentional injury, or injury caused by drunk driving may also survive.
- Can my Chapter 7 case be dismissed?
- Yes. Under 11 U.S.C. § 707(a), the court may dismiss a case for cause after notice and a hearing, including unreasonable delay prejudicial to creditors or nonpayment of required fees. Under § 707(b), a case filed by an individual whose debts are primarily consumer debts may be dismissed if granting relief would be an abuse. Cases are also dismissed when a debtor fails to appear at the creditors' meeting.
- What is the meeting of creditors?
- It is a required meeting, also called a 341 meeting, conducted by the case trustee rather than a judge (Bankr. N.D. Iowa). You appear and testify under oath about your financial condition, assets and liabilities, and answer questions about the paperwork you filed. Creditors may attend and question you. Failing to attend can lead the trustee to seek dismissal of your case.
- What is a reaffirmation agreement?
- A reaffirmation agreement is a contract with a creditor by which you become legally obligated to pay all or part of an otherwise dischargeable debt (Bankr. M.D. Ala.). It must be filed before the discharge is entered. Debtors without a lawyer must attend a hearing for a judge to determine whether the agreement is valid. Courts strongly advise consulting counsel first.
- Does bankruptcy stop a wage garnishment or a lawsuit?
- Filing under Chapter 7 or Chapter 13 automatically stays, or stops, most collection actions against you, but there are limits (U.S. Bankr. Ct. D. Ariz.). Most domestic relations proceedings and most criminal proceedings are not stayed. If you had a bankruptcy case dismissed within the past year, the stay may last only 30 days unless the court orders otherwise.
Sources
- 11 U.S.C. § 727 — Discharge · official source
- 11 U.S.C. § 707 — Dismissal of a case or conversion to a case under chapter 11 or 13 · official source
- 11 U.S.C. § 109 — Who may be a debtor · official source
- 11 U.S.C. § 523 — Exceptions to discharge · official source
- 11 U.S.C. § 541 — Property of the estate · official source
- 28 U.S.C. § 1930(a)(1)(A), (f)(1)
- Bankruptcy Court Miscellaneous Fee Schedule, Item 8
- Bankruptcy Court Miscellaneous Fee Schedule, Item 9
- Bankr. N.D. Iowa official page — Chapter 7 Filing Requirements
- Bankr. N.D. Iowa official page — FAQs: Debtor
- Bankr. N.D. Iowa official page — FAQs
- Bankr. S.D. Iowa official guidance — Instructions - Bankruptcy Forms for Individuals
- Bankr. M.D. La. official guidance — Frequently Asked Questions
- Bankr. E.D. La. official guidance — Chapter 7 Form Packet
- U.S. Bankr. Ct. M.D. Ala., Consumer Pro Se Debtors Guide
- U.S. Bankr. Ct. D. Ariz., Choosing Your Chapter: What can Bankruptcy do for you? What will it do to you?
- Bankr. D. Minn. official guidance — Chapter 7 Process for Debtors without an Attorney
- Bankr. W.D. Ky. official guidance — Guide to Filing Bankruptcy without an Attorney
- Bankr. N.D. Ind. official page — Frequently Asked Questions Concerning Practice & Procedure in Cases Assigned to Judge Grant
- Bankr. M.D. Fla. Procedure Manual — Presumption of Abuse - Chapter 7
By Antonio G. Jimenez, Esq. · Florida Bar No. 21022
Last reviewed July 26, 2026 · Sources verified July 26, 2026 · How we verify
Every figure on this page is drawn from a primary legal source and checked against our canonical legal database before publication. Bankruptcy.law is not a law firm and does not provide legal advice.
Related
Turn this into a plan for your exact situation, state, and court.
See My Debt Relief Options→