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In most cases, no. Chapter 7 only reaches equity that isn’t protected by an exemption, and homes are typically protected by a “homestead exemption.” If you use the federal exemptions, the current homestead exemption is $31,575 of equity (or $63,150 for a married couple filing together and jointly owning the home) for cases filed between April 1, 2025 and March 31, 2028.

Two things matter most: how much equity you actually have (market value minus what you owe), and which state’s exemption list applies to your case. Many states opt their residents out of the federal list and use their own homestead exemption instead — some, like Texas and Florida, protect an unlimited dollar amount of home equity (subject to acreage and residency rules), while others cap it much lower than the federal number. You also need to stay current on your mortgage payments — Chapter 7 discharges your personal liability for other debts, but it doesn’t erase a mortgage lien, so falling behind can still lead to foreclosure.

Usually not. A “motor vehicle exemption” protects a set amount of equity in your car, truck, or motorcycle. Under the federal exemptions currently in effect, that amount is $5,025 per vehicle — and most filers also have some or all of their wildcard exemption (below) left over to cover any equity above that if needed. States that use their own exemption lists set their own vehicle exemption amounts, which can be higher or lower.

If you still owe money on the car, you generally have three options:

• Reaffirm the debt — keep the car and keep making payments under a new agreement the court approves.
• Redeem it — pay the lender the car’s current market value (often less than the loan balance) in a lump sum.
• Surrender it — give the car back and discharge whatever you still owe on it.

If a car is paid off and its equity exceeds the exemption you have available, the trustee could sell it and pay you the exempt portion — though in practice this is uncommon for an ordinary car with typical mileage and value.

This is one of the most common questions, and the honest answer is: it depends, because there’s no single flat dollar figure that applies to everyone. Cash and money in checking or savings accounts are protected using whatever “wildcard” exemption applies to your case — an amount you can apply to any property, cash included.

Under the current federal exemptions, the wildcard is $1,675, plus up to $15,800 of any unused portion of your homestead exemption — meaning a filer who doesn’t own a home (or has little home equity to protect) can potentially shield close to $17,475 in cash and other personal property. Filers using a state’s own exemption list instead will have a different wildcard amount, and some states have a separate, specific cash exemption on top of it.

Most people keep the vast majority of their belongings. Beyond the home, car, and cash exemptions above, current federal exemptions also protect (among other things):

• Household goods and furnishings — up to $800 per item, $16,850 total
• Jewelry — up to $2,125
• Tools of your trade — up to $3,175
• Health aids — no dollar limit
• Retirement accounts (401(k)s, most IRAs) — generally fully protected, with IRAs capped around $1.7 million

Public benefits, most personal injury settlements up to a set amount, and a portion of unpaid wages are also commonly protected. Again, if your state has opted out of the federal list, its own amounts apply instead.

Chapter 7 — sometimes called “liquidation” or “straight” bankruptcy — is the process of wiping out most unsecured debts (credit cards, medical bills, personal loans) in exchange for allowing a court-appointed trustee to sell any of your property that isn’t exempt. In practice, because exemptions are generous and most filers don’t have much nonexempt property, the large majority of Chapter 7 cases are “no-asset” cases: nothing gets sold, and the filer keeps everything while their qualifying debts are discharged.

Eligibility comes down to the “means test.” If your household income over the past six months, annualized, is below your state’s median income for a household your size, you automatically pass and can file Chapter 7. If your income is above the median, the test moves to a second step that subtracts allowed monthly expenses from your income to see how much you’d have left over for creditors. Too much leftover income can disqualify you from Chapter 7 — though large households, high housing or car payments, and other allowed expenses often bring qualifying income much higher than people expect. Filers who don’t pass the means test typically look at Chapter 13 instead.

Most unsecured, non-priority debt is dischargeable, including credit card balances, medical bills, personal loans, past-due utility bills, and most judgments. A discharge releases you from personal liability, so those creditors can never legally collect from you again.

Some debts generally survive Chapter 7 regardless of how the rest of the case goes, including:

• Most federal and private student loans (absent a successful, fact-intensive “undue hardship” showing)
• Domestic support obligations — child support and alimony
• Most recent tax debt (though some older income tax debt can qualify for discharge under specific conditions)
• Debts from fraud, embezzlement, or willful/malicious injury
• Most criminal fines and restitution
• Debts you forget to list on your bankruptcy schedules, in some circumstances

Yes, almost immediately. The moment your case is filed, an “automatic stay” goes into effect, legally requiring creditors to stop collection calls, letters, wage garnishments, and (with limited exceptions) lawsuits and foreclosure or repossession proceedings. Creditors who continue collection efforts after being notified can face court sanctions.

A typical, straightforward Chapter 7 case takes about four to six months from filing to discharge. Roughly three to five weeks after you file, you’ll attend a brief “341 meeting of creditors” with the trustee — most take less than ten minutes. Creditors then have 30 days after that meeting to formally object to your discharge, and if no one does, the discharge is usually entered about 60 days after the meeting. Cases involving real estate sales, disputes, or missing paperwork can take longer.

A Chapter 7 filing can stay on your credit report for up to 10 years. How much your score actually drops depends heavily on where you’re starting from — someone with strong credit going in will see a bigger initial hit than someone whose credit is already damaged by missed payments and high balances, since there’s less room left to fall. Many clients start rebuilding immediately with on-time payments and a secured or starter credit card, and for people already struggling with defaults and collections, bankruptcy is often a faster path to a rebuilding credit score than continuing to fall behind.

You’re not legally required to have one, but bankruptcy involves federal law, detailed financial disclosures, exemption strategy, and deadlines where a mistake can cost you property or even your discharge. An attorney also handles the paperwork, represents you at the creditors’ meeting, and can flag issues — like a recent large payment to a relative, or equity sitting close to an exemption limit — before they become a problem in your case.

Yes, but not right away. If you received a Chapter 7 discharge before, you generally have to wait 8 years from your prior filing date to file — and get a discharge in — another Chapter 7 case. Different waiting periods apply if you’re switching between Chapter 7 and Chapter 13.