# How to File for Bankruptcy in 2026
Bankruptcy offers a legal reset for people drowning in debt. The process varies depending on which chapter you file under, and understanding the steps now positions you to act quickly if circumstances demand it.
Chapter 7 bankruptcy liquidates your assets to pay creditors. Chapter 13 creates a repayment plan over three to five years. Most individuals file Chapter 7, which typically takes four to six months from filing to discharge. Chapter 13 stretches longer, often three to five years of payments.
The first step involves getting credit counseling from an approved nonprofit agency. This is mandatory and costs $50 to $100. Next, you file a petition with the bankruptcy court in your district. You'll submit detailed financial documents including tax returns, bank statements, and a list of all debts and assets. The filing fee runs $338 for Chapter 7 and $313 for Chapter 13, though you can request a fee waiver if your income falls below the poverty line.
After filing, an automatic stay kicks in immediately. This stops creditor calls, lawsuits, and foreclosure proceedings. A trustee is assigned to your case. For Chapter 7, they review your assets and sell nonexempt property. For Chapter 13, they oversee your repayment plan.
You'll attend a meeting of creditors, commonly called a 341 meeting. Your trustee and creditors can ask questions about your finances. Most creditors don't show up. For Chapter 7, if creditors don't object, your remaining eligible debts get discharged three to four months later. For Chapter 13, you begin making monthly payments to the trustee, who distributes funds to creditors according to your confirmed plan.
Bankruptcy damages your credit score, typically dropping it 130 to 200 points. Chapter