Filing for Chapter 7 bankruptcy can be complex

Take a bankruptcy self-filing quiz

If a debtor is considering filing for Chapter 7 bankruptcy, it may be tempting to take a do-it-yourself approach to avoid attorney or preparer fees. However, experts caution that this could come back to bite filers. A quiz can help would-be filers explore whether their cases are complex enough to necessitate a lawyer.

For some debtors without assets that can be sold or returned, filing for bankruptcy can provide a path toward a clean slate

However, the bankruptcy process does not apply to several types of common debt, including money owed toward child support or alimony payments. Most debtors also do not qualify for relief from student loan payments.

Bankruptcy is a legal way to manage overwhelming debt, whether for individuals, corporations, or even local governments

Chapter 7 is for liquidating personal assets to clear debts, Chapter 13 allows a repayment plan for individuals, and Chapter 11 lets businesses reorganize to stay afloat.

Some people make too much money to file for Chapter 7 bankruptcy

Chapter 7 is the most popular type of filing for individuals needing relief. However, to be eligible, debtors must pass an income means test. At the most basic level, they must prove that their average monthly income over six months is below their state’s median. But there are exceptions.

Credit scores seriously suffer when individuals file for bankruptcy, and there’s no easy fix

Those who file for Chapter 7 must wait 10 years before the bankruptcy is removed from their credit report. For Chapter 13, the wait time is seven years.

Calculate: Do you need to file for bankruptcy?

About 77% of American households had some debt at the end of 2023. However, when debt becomes crushing, it's time to consider a management plan or a bankruptcy filing. This calculator helps explore whether debt is manageable based on inputs like medical debt, payday loans, and gross annual income.

The most common types of bankruptcy filings are Chapter 7, Chapter 11, and Chapter 13

However, there are actually six types in practice today. These less-common options can be lifelines for foreign businesses operating in the US, local governments, and farms and fisheries.

Brush up on your bankruptcy vocab

The technical term for what happens when a court removes a debtor’s obligation to repay money owed is “discharge.” An “automatic stay” is what goes into place once a filing occurs to prevent a debtor from facing lawsuits, evictions, and other negative consequences until the process wraps up.

Every year, nearly 500,000 bankruptcies are filed in the US

From personal hardships to major corporate collapses like Enron and Bed Bath & Beyond, filing for bankruptcy isn't a quick fix or a “get-out-of-jail-free” card—it’s a complex, structured process offering debt relief or repayment options.

Chapter 7 and Chapter 11 filings can impact common stockholders

Publicly traded companies don’t file for bankruptcy out of nowhere—there are typically warning signs in a stock’s performance, quarterly earnings calls, and US Securities and Exchange Commission filings.

There’s an artificial intelligence model trained on bankruptcy law

Although it's designed for lawyers, the tool is able to help everyday browsers synthesize important cases and point users to relevant documents about them. One sample using it asks Chatlaw to explain the significance of a recent case and then to define relevant terminology.

Read why the information Americans have about our tax system might be misleading

For many, filing taxes can be complicated and overwhelming. Some argue that the tax system obscures certain aspects of the US tax code, making it difficult for taxpayers to accurately assess potential reforms.

Estate planning involves organizing your financial documents—and making sure your family knows where to find them

This article offers tips for keeping yourself organized, such as the list of documents your family may need and suggestions for where to keep the files, both digital and physical.

Tom Petty used bankruptcy to change the music industry

In order to resolve a dispute over how a label was treating him as an artist, he self-produced an album and racked up $500K in debt. The resulting bankruptcy filing allowed him to start a new contract with the label on more favorable terms.

Payday lenders usually require borrowers to post-date a check or provide access to an electronic bank account

If borrowers can't pay back the loan, they can be subject to overdraft fees from their bank and other fees from the payday lender—further exacerbating the debt borrowers face.

Smart tips for making the most of your 401(k)

There’s a lot of advice about handling a 401(k), but it can be mired in disclaimers and legalese. Come prepared to your financial advisor or accountant by watching this informative take on how to properly use a 401(k), from consolidating plans to some of the most common errors.

Addressing psychological barriers to building wealth

Almost half of adults in the US report owning no investable assets. For many, the barrier to entry is the belief that investing is too complex for them to get involved. Consulting with a financial psychologist, this article addresses the cognitive bias that causes so many people to miss out on financial opportunities, and offers tips on how to get past the anxieties and just begin.

Learn how to read a prospectus, the juicy document that any company must file with the SEC before going public.

The federal debt ceiling 101

The debt ceiling periodically takes center stage as Congress debates whether to increase or suspend this self-imposed limit on its borrowing authority. Learn the basics on this crucial feature of US fiscal policy with this Q&A.

Master the banking basics

Before deciding on a credit union, it’s important that you understand the basics. That way you can know exactly what’s happening with your hard-earned money behind the scenes. Flip through these flashcards to make sure you understand key terms like “deposit” and “checking account.” Then, you can read up on top banking products and start to find a credit union that works for you. Click here, then scroll down the page to find the cards.

Probate is a legal process that determines if someone’s will is valid

The executor of the will in question not only collects estate assets, but also pays outstanding taxes and more. Grantors sometimes opt for a revocable trust instead of a will so their assets avoid probate in the event of their death.

The first steps to rebuilding your credit score include getting to know exactly what's on your credit report and figuring out how far you are from the '700 club,' or 'good score' range.

US consumers collectively owe more than $1T to credit card companies—almost as much as they owe in auto loans.

Play the role of a student as you try to navigate college and remain debt-free

The Consumer Financial Protection Bureau is looking closely at BNPL

Given the lack of data around BNPL services in comparison to other financial products such as credit cards, the CFPB has conducted research to better understand BNPL products and how they could harm and benefit consumers.

How to calculate your net worth

Someone's net worth is the value of their assets minus their liabilities. Assets may include a home or a retirement savings account, whereas examples of liabilities include student or credit card debt.

Alternative investments can be sorted into seven major categories, according to some experts

These categories include real estate, private equity, private debt, hedge funds, collectibles, and more.

Play the role of a student in a game where you try to navigate college and remain debt-free, selecting different income levels, high school experience, race, ethnicity, and more.

Each state has its own regulations regarding marriage

Some states don’t even require a ceremony or license, opting to allow “common law” marriages. Prenuptial agreements and other legal matters will likely require an attorney’s help. And marriages can offer benefits, like tax breaks.

Hedge funds, the private investment firms that trade a wide swath of financial assets, make money by imposing steep fees on investors and from the fund's investment performance.

Doctors differentiate between a phobia and fear by asking patients whether their fear interferes with their day-to-day activities.

Use this calculator to find the dollar value of your mental load, from meal planning to coordinating after-school care for your children.

Discover the catastrophic consequences of a failure of the US electrical grid—something that is more likely than many Americans think.

About 2,000 US babies are born annually without some portion of their limbs, potentially leading to a lifetime of pricey prosthetics.

See a ranking of the best (and worst) Federal Reserve Chairs since 1914 out of the 16 men and women who have held the office since.

Art theft is the third-largest source of criminal revenues worldwide, thanks in part to the subjective nature of valuing a work of art.

Chaos theory—informally known as the butterfly effect—is the reason why weather forecasts are presented with probabilities rather than certainties.

Gerrymandering works through two techniques: cracking opposing voters across districts to dilute their power, and packing them into a few to waste their votes in lopsided majorities.

Meet the 56 signers of the Declaration of Independence—most of whom didn't put pen to paper until August 2, 1776—and see their original signatures.

The rivalry between Alexander Hamilton and Thomas Jefferson centered on federalism—the question of how much power the federal government should hold relative to the states.

Explore the known asteroids, comets, and spacecraft involved in asteroid studies within our solar system with 'Eyes on Asteroids,' a 3D visualization from NASA.

According to the physics of black holes, our 4D reality may be a hologram—a projection of information coded on a 2D surface on the edge of the universe.

SpongeBob exemplifies Aristotle's philosophy for living well because he understands that happiness doesn't come from external factors like money, recognition, or power.

Search a massive database of over 4 decades of clues from the TV quiz show 'Jeopardy!'

Ebola is a filovirus, meaning it resembles a thread under a microscope, though it sometimes twists and can resemble a bowl of spaghetti.

The Brothers Grimm were lawyers before they were storytellers, and became interested in fairy tales as they began investigating how rules and customs had been passed down through cultures.

Louisiana's 'Cancer Alley' is infamous for having some of the highest industrial pollution, toxic air emissions, and cancer risks in the US.

Crows are believed to have intelligence on par with a seven-year-old child and demonstrate complex behaviors, from problem-solving with tools to recognizing human faces.

The Ramones' 'Pet Sematary,' the theme song for the Stephen King novel of the same name, was written while the band was admiring the writer's collection of horror memorabilia.

Pure water does not conduct electricity because this flow of energy requires the movement of charged particles, and water is a neutral molecule.