📅 2026 Update: Changes in U.S. Bankruptcy Laws

Since the original article was published, there have been several important changes to U.S. bankruptcy laws. These updates affect the means test, exemptions, and automatic stay periods. The details below provide key insights into how these changes might impact those considering bankruptcy.

The original article continues further down this page.

📊 Means Test Adjustments

In 2025, the U.S. Department of Justice revised the median income figures for the Chapter 7 means test. This change affects eligibility for those wishing to file for Chapter 7 bankruptcy.

Debtors must compare their income to the updated median income in their state to determine qualifying status.

  • 🏷️ Eligibility: If income is below the new median, individuals qualify for Chapter 7. If it exceeds the median, they may need to explore Chapter 13.

🏠 Exemption Updates

Several states made adjustments to their bankruptcy exemptions in 2024. These updates have increased the homestead exemption limits to reflect inflation.

  • 💰 Protection: The homestead exemption protects a portion of a debtor's home equity from creditors. This can provide significant relief for those facing foreclosure.

⏳ Automatic Stay Provisions

In 2026, the Bankruptcy Abuse Prevention and Consumer Protection Act was amended. This change extended the automatic stay period for certain debtors from 30 days to 60 days.

  • 🛑 Immediate Relief: The automatic stay goes into effect upon filing for bankruptcy, halting most collection actions against the debtor. This gives individuals more time to organize their financial situation.

📅 Filing Fees and Costs

As of October 2026, the filing fees for bankruptcy have been updated. The Chapter 7 filing fee is now $338, while the Chapter 13 filing fee is $313.

  • 📜 Credit Counseling: Debtors must also complete a credit counseling course, which typically costs between $20 and $50. This is a necessary step before filing.

📌 Key Points

  • 📊 Means test figures have changed, affecting eligibility.
  • 🏠 Homestead exemptions have been updated for inflation.
  • ⏳ Automatic stay period extended from 30 to 60 days.
  • 📅 Chapter 7 and Chapter 13 filing fees updated.
  • 📜 Credit counseling course is mandatory before filing.

💡 Practical Tips for Filing Bankruptcy

Review the details of your situation with your attorney. Understanding your unique circumstances is essential.

📝 Gather Financial Documents

Before filing for bankruptcy, collect all necessary financial documents. This includes income statements, tax returns, and a list of debts. Having everything organized will help streamline the filing process.

🕒 Complete Required Courses

Debtors must complete a credit counseling course within 180 days before filing. After filing, a debtor education course is also necessary. Make sure to schedule these courses early to avoid delays.

📋 Use Official Bankruptcy Forms

The U.S. Courts website offers all the required bankruptcy forms. These can be downloaded for free.

Ensure you fill them out completely to prevent any processing issues.

⏳ Timelines Matter

Know the estimated processing times for your bankruptcy type. Chapter 7 typically takes 3 to 6 months, while Chapter 13 can last between 3 to 5 years. Planning accordingly can help manage expectations.

⚖️ Understand Dischargeable Debts

Not all debts are dischargeable in bankruptcy. For example, student loans and certain taxes are usually not eligible for discharge. Be aware of what debts you can and cannot eliminate through bankruptcy.

🏆 Bankruptcy Services Ranked by User Reviews (2026)

This section highlights services relevant to bankruptcy, focusing on credit repair and debt management. The order of these services is based on Trustpilot data as of October 2026. Ratings can change over time, and star ratings are just one measure, as unhappy customers often leave more feedback.

🥇 1. CreditRepair.com

CreditRepair.com holds a Trustpilot score of 1.2. The service is known for its credit repair and debt management offerings. However, many reviewers have expressed concerns over service quality and billing issues**.

It is advisable for potential users to read reviews carefully before deciding.

🥈 2. Lexington Law

Lexington Law averages a Trustpilot score of 3.2. This service is also focused on credit repair and debt management. While some users report positive experiences, others have noted mixed reviews** about service quality and billing practices.

It's important to consider these factors when evaluating this option.

🆓 Free Credit Counseling Agencies

Approved by the U.S. Trustee Program, these agencies provide free or low-cost credit counseling services. They can help individuals understand their financial situation and explore their options.

Many nonprofit organizations also offer free legal assistance to those considering bankruptcy.

🔎 Choosing the Right Service

  • 🔍 Compare Trustpilot scores and read reviews.
  • 📅 Check if the service offers specific bankruptcy-related support.
  • 💬 Look for transparency in fees and services.
  • 🛡️ Ensure the service has a good reputation for customer support.

❓ Frequently Asked Questions

🤔 What is the means test for Chapter 7 bankruptcy?

The means test compares your income to the median income in your state. If your income is below the median, you qualify for Chapter 7 bankruptcy.

📅 How long does it take to process Chapter 13 bankruptcy?

Chapter 13 bankruptcy usually lasts between 3 to 5 years, depending on the repayment plan agreed upon with creditors.

📖 Can I get credit after filing for bankruptcy?

Yes, while it may be challenging, obtaining credit after bankruptcy is possible. Debtors can start by applying for secured credit cards or credit-builder loans.

🏡 What is the homestead exemption?

The homestead exemption allows debtors to protect a portion of their home equity from creditors. This exemption varies by state and has been updated for inflation in recent years.

🛑 What happens to collection actions after I file for bankruptcy?

Once you file for bankruptcy, an automatic stay goes into effect. This halts most collection actions against you, giving you time to manage your finances.

📜 Are student loans dischargeable in bankruptcy?

Discharging student loans is difficult in bankruptcy. Debtors must prove undue hardship, which is a high legal standard to meet.

⚖️ Recent Cases in Bankruptcy Law

Recent court rulings have addressed various aspects of bankruptcy law, impacting how individuals and businesses navigate their financial challenges.

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

End of October 2026 Update





Certainly, bankruptcy cases may not begin without bankruptcy petitions. However, declaring bankruptcy is not as simple as just verbally stating one is bankrupt or handing a signed statement to authorities. As with essentially any other legal process or means of relief, a formal recognition of one's insolvency is contingent on the submission of an application. In terms of the documentation that signifies one's appeal to the courts for relief under the Bankruptcy Code, a bankruptcy petition form must be completed in full. In truth, forms for bankruptcy petitions are fairly straightforward, but nonetheless, they must be understood and filled out correctly as far as the debtor's circumstances are concerned.

The following are some things to consider when completing and filing a bankruptcy petition form:

Statistically, the majority of bankruptcy petitions are requested by the party in debt. The importance of the initial voluntary bankruptcy petition form is connoted by the primacy of its official designation with the U.S. Bankruptcy Courts: the B-1 Voluntary Petition. B-1 bankruptcy petitions contain a number of different specific fields that are relevant to classifying one's need for bankruptcy.

Of course, the voluntary bankruptcy petition form contains more basic information that is standard to most applications, such as name, mailing address/residence, and Social Security number, if applicable. As for the more particular aspects of the petition, they include the type of debtor filing (individual vs. partnership/corporation), the chapter of the Bankruptcy Code under which one is filing, and the nature of one's debts (i.e. consumer-based vs. business-oriented). In addition, applicants will need to indicate on bankruptcy petitions how many creditors they owe and the estimated amounts of all debts/liabilities.

Appeals to filing for bankruptcy do not necessarily need to come from debtors, though. Indeed, there are mechanisms in place for petitions to be filed by creditors in the hopes of collecting on their investments. It should be noted that a separate bankruptcy petition form exists for an involuntary petition: the B-5 Involuntary Petition. Realistically, though, B-5 bankruptcy petitions are fairly similar to their voluntary counterparts.

The primary distinction made in the actual documentation is that the identifying data and estimates of debts and obligations are presumptions on the part of a lender-applicant based on known information. There is also a special section for allegations made of the debtor, including the assertion that he or she is not making payments on his or her liabilities.

Regardless of the exact bankruptcy petition form that a person, corporation or other entity must submit to the court, unless the court recognizes the debtor's material inability to pay the fines as they are, requisite filing fees will be attached.

Exact fees vary for the chapter under which the form is filed, but whatever the case, applicants should expect to part with $200 or more. Plus, there are miscellaneous charges for all bankruptcy petitions of which to take note. Specifically, there are a $39 administrative fee and $15 trustee surcharge.

Consider the Following Before Filling Out A Bankruptcy Petition