What you keep and what changes
Personal bankruptcy does not mean losing everything. Exemptions protect a share of home equity, a vehicle, household goods, and many retirement accounts, and many filers keep all of their property. Under Chapter 7, unprotected property can be sold by a trustee and most unsecured debts are discharged; under Chapter 13, you keep property and repay part of your debt through a plan. A filing appears on your credit report for a time, though many people find their credit begins recovering sooner than they feared. Married couples can file jointly or separately, and the choice affects whose debts and property are included.
The steps on either side of the filing
Before you file, you complete a credit counseling session with an approved agency, and after filing you take a short financial management course before the discharge. Gather pay stubs, tax returns, bank and retirement account statements, titles and loan papers for vehicles, and a full list of creditors with balances. Be honest and complete, since leaving out an asset or a debt can undermine the whole case. Avoid running up new charges or repaying relatives just before filing, because those transactions are reviewed. If a family member co-signed a loan, tell us early, because the co-signer may still be pursued.
The choices we work through together
We start with your income and what you need to protect, then test whether you qualify for Chapter 7 or whether Chapter 13 fits better. A car loan you want to keep, a house with equity, or tax debts can tip the balance. We also check whether a recent move between states affects which exemptions apply, since residence history matters. Some people learn they do not need to file at all, because their income and property are already protected from collection. Others learn that waiting for a particular event, or filing promptly before one, makes a real difference. If a garnishment or lawsuit is already underway, that usually moves the timing forward.
