Bankruptcy Costs in Time and Money

The whole Chapter 7 bankruptcy process takes about four to six months, costs $274 in filing and administrative fees, and commonly requires only one trip to the courthouse.

Who Can File

Chapter 7 can be a powerful remedy for debt problems, but it isn't available to everyone. For example, you won't be able to use Chapter 7 if you already received a bankruptcy discharge in the last six to eight years (depending which type of bankruptcy you filed) or if, based on your income, expenses, and debt burden, you could feasibly complete a Chapter 13 repayment plan. (For more information on these eligibility requirements, see Who Can File for Chapter 7 Bankruptcy?.)

Bankruptcy Forms

To file for bankruptcy, you fill out a two-page petition and a number of other forms. Then you file the petition and forms with the bankruptcy court in your area. Basically, the forms ask you to describe:

• your property
• your current income and its sources
• your current monthly living expenses
• your debts
• property you claim the law allows you to keep through the bankruptcy process (called "exempt property") -- most states let you keep some equity in your home, clothing, household furnishings, Social Security payments you haven't spent, and other necessities such as a car and the tools of your trade.
• property you owned and money you spent during the previous two years, and
• property you sold or gave away during the previous two years.