What does filing for bankruptcy actually do?

Filing puts your case in front of a federal court and triggers an automatic stay that stops most collection activity. Depending on the chapter you file, the court then either erases qualifying debts or approves a plan to repay them over three to five years.

How much does it cost to file for bankruptcy?

The court filing fee is $338 for Chapter 7 and $313 for Chapter 13. You can apply to pay in installments, and low-income Chapter 7 filers may qualify for a fee waiver. Attorney fees, if you use a lawyer, are separate.

What form do you file to start a bankruptcy case?

Individuals start a case with the Voluntary Petition for Individuals Filing for Bankruptcy, Official Form B101. It is filed along with schedules that list your income, property, debts, and expenses.

Does filing stop creditors from contacting me?

Yes. The automatic stay under 11 U.S.C. § 362 takes effect the moment you file and stops most calls, lawsuits, wage garnishments, foreclosures, and repossessions while your case is active.

What Is Filing for Bankruptcy?

Filing for bankruptcy means asking a federal court for legal protection from debts you cannot repay. You submit a petition and financial paperwork, and in return the court can either wipe out qualifying debts or set up a supervised plan to pay them back over time.

What Does Filing for Bankruptcy Mean?

Bankruptcy is a legal process under federal law that helps individuals and businesses eliminate or repay debt under the protection of the bankruptcy court. "Filing" is the act that starts it: you submit a petition to the court, and from that point your case is governed by the Bankruptcy Code.

Individuals begin with the Voluntary Petition for Individuals Filing for Bankruptcy (Official Form B101), filed alongside schedules that list your income, property, debts, and monthly expenses. Filing costs money too: the court fee is $338 for Chapter 7 and $313 for Chapter 13. You can pay it in installments, and qualifying low-income Chapter 7 filers can have it waived entirely. If you are still deciding whether any of this applies to you, our bankruptcy FAQ answers the broader question of what bankruptcy is. This page focuses on what filing means; for the paperwork and sequence, see how to file for bankruptcy.

What Happens When You File

The single most important thing filing does is trigger the automatic stay under 11 U.S.C. § 362. The moment your petition reaches the court, this order takes effect and stops most collection activity: creditor phone calls, lawsuits, wage garnishments, bank levies, foreclosures, and repossessions all have to pause while your case is active.

Chapter 7 court filing fee

$338

In effect since December 2020. Installments and fee waivers available.

From there, a court-appointed trustee reviews your paperwork. You attend a short 341 meeting of creditors, where the trustee asks questions under oath about your finances. If everything is in order, your case ends with a discharge — a permanent court order releasing you from personal liability for the debts that qualify. A creditor who keeps trying to collect a discharged debt can be held in contempt of court.

The Different Types of Bankruptcy

There is no single kind of bankruptcy. You file under a specific chapter of the Bankruptcy Code, and the chapter determines whether your debts are erased or reorganized. The two most common for individuals are Chapter 7 and Chapter 13.

Common bankruptcy chapters
Chapter	What it does	Timeline
Chapter 7	Liquidation — eliminates most unsecured debts; exempt property is protected	3-4 months
Chapter 13	Reorganization — keeps all property and repays debt through a court-approved plan	3-5 years
Chapter 11	Complex reorganization for businesses or individuals over the Chapter 13 limits	Typically 1-3 years
Chapter 12	Reorganization for family farmers and fishermen with regular annual income	3-5 years

Chapter 7 is the fast route for people with limited income and mostly unsecured debt. Chapter 13 suits those who want to keep property and catch up on missed mortgage or car payments over time. Chapter 13 does carry debt ceilings: secured debts must stay under $1,580,125 and unsecured under $526,700 (limits effective April 1, 2025). If you are weighing the two, the Chapter 7 vs Chapter 13 comparison breaks down the trade-offs.

Is Filing Right for You?

Filing may make sense if you cannot realistically pay what you owe, you are facing lawsuits or wage garnishment, or you are at risk of foreclosure or repossession. Bankruptcy exemptions protect essential property up to set limits, and most Chapter 7 filers keep everything they own. The trade-off is lasting: the filing becomes part of the public record and affects your credit for years.

Filing is not the only option. Debt negotiation, a debt management plan through a nonprofit credit counseling agency, or consolidation may resolve the problem without a court case, and it is worth comparing those alternatives to bankruptcy first. When filing is the right call, the how to file for bankruptcy guide walks through each step.