📅 2026 Update: Changes in Bankruptcy Law

Since the original article was written, there have been notable updates in bankruptcy law, particularly regarding Chapter 13 debt limits and procedural requirements. These changes affect how individuals navigate bankruptcy and what options may be available to them. The earlier article continues further down the page, providing a foundational understanding of bankruptcy law.

💰 Chapter 13 Debt Limits

As of March 31, 2028, the debt limits for Chapter 13 bankruptcy have increased. The new limits are $1,580,125 for secured debts and $526,700 for unsecured debts. These figures are periodically updated and published in the Federal Register, making it essential for individuals considering Chapter 13 to stay informed.

📊 Means Test Updates

The Chapter 7 Means Test Calculation is still required for those seeking to qualify for Chapter 7 bankruptcy. This form assesses an individual's income and expenses to determine disposable income. Passing this test remains crucial for eligibility.

🕒 Processing Times

In Chapter 7 bankruptcy, individuals typically receive a discharge of qualifying debts about four months after filing. In contrast, Chapter 13 bankruptcy allows individuals to repay debts over three to five years through a court-approved plan, depending on their income and the specifics of their repayment arrangement.

📚 Credit Counseling Requirement

Before filing for bankruptcy, individuals must complete a credit counseling course from an approved agency within 180 days. This requirement is designed to help individuals understand their financial situation and explore their options before proceeding with bankruptcy.

📌 Key Changes Summary

  • 🏦 Chapter 13 debt limits raised to $1,580,125 (secured) and $526,700 (unsecured).
  • 📋 Chapter 7 Means Test continues to assess eligibility.
  • ⏳ Chapter 7 debts discharged in about four months.
  • 🗓️ Credit counseling must be completed within 180 days before filing.
  • 💼 Chapter 13 repayment plans last between three to five years.

💡 Tips for Navigating Bankruptcy

Review the details of your situation with your attorney to understand your options better.

📅 Stay Informed About Debt Limits

The debt limits for Chapter 13 bankruptcy have increased. Knowing the current figures is crucial for those considering this option.

📊 Complete the Means Test

To qualify for Chapter 7, individuals must complete the Means Test Calculation. This step evaluates your financial situation and helps determine your eligibility.

🏦 Understand the Automatic Stay

Filing for bankruptcy triggers an automatic stay, halting foreclosure proceedings. This protection can provide temporary relief during financial difficulties.

📚 Consider Credit Counseling

Before filing, you must complete a credit counseling course from an approved agency. This can help clarify your financial situation and explore alternatives.

🏠 Know Your Exemptions

Bankruptcy exemptions vary by state and protect essential property from creditors. Understanding what you can keep is vital in the bankruptcy process.

🔄 Explore Conversion Options

If you are in Chapter 13 and meet the qualifications, you may convert to Chapter 7. This option allows for different strategies in managing debts.

🏆 Free Options Ranked by User Reviews (2026)

No national paid service in this area met the review threshold, so this section lists free government and nonprofit resources for those seeking help with bankruptcy.

🥇 1. Credit Counseling Agencies

Approved credit counseling agencies offer free or low-cost services to help individuals understand their financial situations. These agencies can assist in exploring bankruptcy options and provide guidance through the process.

🥈 2. U.S. Trustee Program

The U.S. Trustee Program oversees the administration of bankruptcy cases and private trustees. They provide resources and information on filing for bankruptcy, helping individuals understand their rights and responsibilities.

🥉 3. Federal Register

The Federal Register publishes updates on various bankruptcy laws, including changes to debt limits. Individuals can check this resource for the latest information on eligibility and other key factors in bankruptcy proceedings.

4️⃣ Local Nonprofit Organizations

Many local nonprofit organizations offer free financial counseling services. They help individuals assess their situations and explore various options, including bankruptcy, without any cost.

5️⃣ State Bar Association Resources

State bar associations often provide resources and referrals for individuals seeking legal assistance with bankruptcy. They can connect individuals with approved agencies and provide information on the bankruptcy process.

🔎 What to Check Before Paying for Help

  • 💼 Verify the credentials of the service provider.
  • 📊 Look for reviews and ratings from past clients.
  • 🏷️ Ensure they are approved by the U.S. Trustee Program.
  • 📅 Confirm the services are offered at no or low cost.

❓ Frequently Asked Questions

❓ What is the automatic stay in bankruptcy?

The automatic stay is a legal provision that halts all collection actions against the debtor when they file for bankruptcy. This includes stopping foreclosure, wage garnishments, and other creditor actions.

💳 Can I keep my credit cards after filing for bankruptcy?

Generally, credit cards are considered unsecured debts and can be discharged in bankruptcy. However, you may be able to keep some credit cards if you reaffirm the debt.

🏠 What property can I exempt in bankruptcy?

Bankruptcy exemptions vary by state and can protect essential property, including a primary residence, personal belongings, and retirement accounts. Understanding local laws is important for maximizing exemptions.

🔄 Can I switch from Chapter 13 to Chapter 7?

Yes, individuals in Chapter 13 bankruptcy can convert to Chapter 7 if they qualify. This decision requires passing the Chapter 7 means test and may involve risks regarding nonexempt property.

📅 How long does a Chapter 13 repayment plan last?

A Chapter 13 repayment plan lasts between three to five years. The length depends on the individual's income level and the specifics of the repayment plan.

👨‍👩‍👧 Can family members help me with my bankruptcy case?

Family members can support you during the bankruptcy process, but they cannot file on your behalf. It's important to consult with legal resources for accurate guidance.

⚖️ Recent Court Rulings Related to Bankruptcy Cases

Recent court rulings have clarified various aspects of bankruptcy law, including the handling of exemptions and the treatment of debt limits in Chapter 13 cases. Understanding these rulings can help individuals navigate their bankruptcy options more effectively.

Explore more recent rulings in the news section for additional insights into bankruptcy law and court decisions. more rulings on the news page.

End of October 2026 Update





Some large-scale law firms will try to drum
up business by offering an array of services and knowledge in several areas of
the law. Some smaller law firms, meanwhile, will feature legal professionals
banding together under one particular branch of the law, offering both the
specialization of their chosen category (as opposed to these catch-all
agencies) and the personal attention that other, bigger firms will not be able to match. Thus, what the latter
perhaps lacks in name recognition and expansiveness of topics covered it may
more than make up for in the quality of assistance it provides.



 

What You Should Look for In A Bankruptcy Law Firms


With bankruptcy law firms, the same
considerations apply. A particular law office may not be a bankruptcy law
firm per sé, but just the same, it may offer a number of attorneys
with a concentration in this field. As for entities that expressly label
themselves as bankruptcy law firms, they might not feature as many options
as far as individual lawyers go, but they are just as likely if not more so to know
what they are doing.



 



Some notes on what to look for in a
bankruptcy law firm depending on your intent moving forward:



         



The majority of bankruptcy law firms are
going to be centered around providing services that are among the most requested
by petitioners. In terms of bankruptcy statistics in the United States, these
are liquidation and rehabilitation programs for everyday people and parties.  Indeed, bankruptcy law firms may be more narrow-minded
when it comes to application of their knowledge to a specific division of the
law.



 



That said, a bankruptcy law
firm may take more than just bankruptcy law into consideration, especially
if those areas are tangential to bankruptcy
and may be relevant to the conversation. For
example, as bankruptcy may manifest itself in the closing of stores and the
foreclosure of homes, attorneys within a given bankruptcy law
firm may also be proficient in business law and real
estate law. This way, legal professionals can offer a more personal approach to
dispensing legal advice while being a greater source of information overall for
consumers.



         



Heretofore, the role of bankruptcy law
firms in affecting the outcomes of bankruptcy cases has only been considered in
terms of the potential benefit to applicants in getting what they need to
overcome their debt. We would be remiss, however, if we did not consider that
creditors have rights and their own interests for requesting to settle matters
before a bankruptcy judge. Though most bankruptcy proceedings are brought on by
a voluntary petition from debtors, lenders might seek a bankruptcy law
firm for a number of purposes, such as requesting bankruptcy to recoup
monies from delinquent debtors and filing proofs
of claim.