Chapter 7 Bankruptcy Explained
Chapter 7 bankruptcy in plain English: what it discharges, the means test, the automatic stay, and how long it takes.
Chapter 7 in a sentence
Chapter 7 — often called liquidation — can discharge qualifying unsecured debts like credit cards and medical bills, usually within a few months, if your income is low enough to pass a means test.
The means test
The means test compares your household income to your state's median. Below it, you generally qualify; above it, a second step weighs your allowed expenses and disposable income.
The automatic stay
Filing triggers an automatic stay that requires most creditors to stop collection activity right away — a major reason people file when facing a garnishment.
What to expect
A straightforward Chapter 7 often resolves in a few months, from filing through the trustee's review and the meeting of creditors to discharge.
Key takeaway
Chapter 7 — often called liquidation — can discharge qualifying unsecured debts like credit cards and medical bills, usually within a few months, if your income is low enough to pass a means test. A free case review with a licensed attorney is the fastest way to know what applies to you.