📅 2026 Update: Changes Affecting Homeowners in Bankruptcy

Since the original article was written, several key changes have taken place in U.S. bankruptcy law that may affect homeowners. These changes include updates to the means test and new electronic filing systems. The earlier article continues below this section, providing a broader understanding of bankruptcy's effects on homeowners.

🆕 📈 Recent Changes in Bankruptcy Law

  • Chapter 13 Bankruptcy Plan Confirmation: In January 2025, the U.S. Bankruptcy Court for the Southern District of New York introduced a new electronic filing system. This change makes it easier for both debtors and creditors to confirm Chapter 13 bankruptcy plans.
  • Means Test Adjustments: As of March 2024, the U.S. Department of Justice revised the median family income figures used in the Chapter 7 means test. This affects the eligibility of debtors who fall into specific income brackets, making it more important for homeowners to understand their financial standing.

💰 💵 Current Fees and Costs

  • Filing Fees: The current filing fees as of October 2026 are $338 for Chapter 7, $1,738 for Chapter 11, and $313 for Chapter 13. These fees can change, so homeowners should be aware of the latest costs before filing.
  • Credit Counseling and Debtor Education: Homeowners must complete credit counseling before filing and debtor education afterward. The average cost for these courses is around $50, but prices can vary.

📜 📝 Required Forms and Steps

  • Forms: Debtors need to fill out several official bankruptcy forms, which include the Voluntary Petition and Schedules A-J. These documents are essential for a successful filing and can be accessed online.
  • Filing Steps: The basic steps include completing the forms, filing them with the court, attending the 341 Meeting of Creditors, and finishing the debtor education course. Homeowners should be thorough in each step to avoid delays.

⏳ ⏲️ Processing Times

  • Chapter 7 and Chapter 13: The processing time for Chapter 7 bankruptcy typically spans 3 to 6 months until discharge. In contrast, Chapter 13 generally lasts between 3 to 5 years, depending on the repayment plan, which can significantly affect a homeowner's financial recovery timeline.

📌 Key Points to Remember

  • 🗓️ New electronic filing system in 2025 for Chapter 13.
  • 📊 Updated means test affects eligibility for Chapter 7.
  • 💵 Current filing fees are $338 (Chapter 7), $1,738 (Chapter 11), and $313 (Chapter 13).
  • 🔄 Required forms include the Voluntary Petition and Schedules A-J.
  • ⏰ Chapter 7 takes 3 to 6 months; Chapter 13 lasts 3 to 5 years.

💡 Tips for Homeowners Facing Bankruptcy

It's crucial to review the details of your specific situation with your attorney. Understanding your financial position can help you make the best decisions.

📝 📋 Understand Your Rights

Homeowners should familiarize themselves with their rights regarding the automatic stay that halts most collection actions upon filing. This can provide immediate relief from foreclosure and repossessions.

💳 📉 Monitor Your Credit

After filing for bankruptcy, it's essential to monitor your credit. Bankruptcy stays on your credit report for 7 years (Chapter 13) or 10 years (Chapter 7), which can affect future borrowing.

📅 ⏰ Keep Track of Deadlines

Be aware of important deadlines, such as completing credit counseling within 180 days before filing. Missing deadlines can complicate your case and delay relief.

🆓 📚 Seek Free Resources

Utilize free or low-cost credit counseling and debtor education services offered by approved agencies. These resources can help you navigate the bankruptcy process more effectively.

💼 💪 Stay Informed

Stay updated on any changes in bankruptcy laws or fees. This can help you plan better and avoid surprises during the filing process.

🏆 Credit Repair Services Ranked by User Reviews (2026)

This section covers credit repair services that can be relevant to homeowners considering bankruptcy. Trustpilot scores reflect user experiences as of October 2026 and may change over time. Ratings are just one way to gauge a service, as unhappy customers often leave more reviews.

🥇 1. Lexington Law

Lexington Law has been rated 3.2 on Trustpilot. The service is known for credit repair, focusing on helping clients dispute inaccuracies on their credit reports. While many users have found it helpful, some complaints mention issues with service quality and responsiveness.

🥈 2. CreditRepair.com

CreditRepair.com holds a low Trustpilot score of 1.2. This service is recognized for its credit repair efforts aimed at improving clients' credit scores. However, numerous negative reviews highlight complaints about billing practices and overall satisfaction.

🆓 Free Credit Counseling and Debtor Education Services

Approved agencies provide free or low-cost credit counseling and debtor education. These agencies can assist homeowners in understanding their options and navigating the bankruptcy process more effectively. A list of approved agencies can be found through the U.S.

Trustee Program.

🔎 What to Compare When Choosing a Credit Repair Service

  • 🌟 Trustpilot score and number of reviews.
  • 🔍 Services offered related to bankruptcy.
  • 💬 Customer feedback on service quality.
  • 💵 Pricing and transparency of fees.
  • 📞 Availability of customer support.

❓ Frequently Asked Questions

❓ What happens to my home if I file for Chapter 7?

In Chapter 7, you may lose your home if it is not exempt under state law. However, if you can keep up with mortgage payments and your home falls under exemption limits, you might retain ownership.

🏠 Can I keep my home if I file for Chapter 13?

Yes, in Chapter 13, you can keep your home as long as you continue making mortgage payments and adhere to your repayment plan. This chapter allows you to catch up on missed payments over time.

🕒 How long does bankruptcy stay on my credit report?

Bankruptcy remains on your credit report for 7 years for Chapter 13 and 10 years for Chapter 7. It can significantly impact your credit score during this time.

🔒 Are there protections against foreclosure during bankruptcy?

Yes, once you file for bankruptcy, an automatic stay is enacted, which stops most collection actions, including foreclosure. This provides temporary relief and time to address debts.

🏦 What are exemptions in bankruptcy?

Exemptions are laws that protect certain property from being sold to pay debts during bankruptcy. Each state has different exemption laws, affecting what you can keep.

📅 What is a 341 Meeting of Creditors?

The 341 Meeting of Creditors is a required meeting where the debtor answers questions about their financial situation. Creditors can attend but often do not. This meeting helps ensure transparency in the bankruptcy process.

⚖️ Recent Bankruptcy Cases

Recent court rulings have impacted how bankruptcy laws are applied to homeowners. These rulings can clarify exemptions, automatic stays, and the treatment of secured debts during the bankruptcy process.

For more recent rulings, check the section more rulings on the news page.

End of October 2026 Update





Often the biggest fear of individuals experiencing extensive financial stress is losing their home. People who are facing bankruptcy may also be facing foreclosure, and thus, many individuals who file for bankruptcy will end up losing their house by the same token.

In many instances, filing for bankruptcy helps struggling individuals keep their homes by imposing an automatic stay. Even after the individual has improved their credit score and saved money for a satisfactory down payment, they will still feel the problems of buying a home after bankruptcy. They will have a much higher interest rate on their mortgage, and therefore, will be required to make a much larger monthly payment.

If an individual can handle the large monthly payment, then purchasing a new home is not impossible. They will be able to start a new life in a new home once their finances are in order.

Consider the Effects of Bankruptcy on Homeowners Before Filing