📅 2026 Update: Key Changes in U.S. Bankruptcy Law

Since the original article was published, several important updates have taken place in U.S. bankruptcy law. These changes could directly affect how individuals and businesses approach bankruptcy filings. The earlier article continues further down the page, providing foundational knowledge on bankruptcy.

📊 Means Test Adjustments

In 2025, the U.S. Department of Justice updated the median income figures used in the Chapter 7 means test. This change affects who may qualify for Chapter 7 bankruptcy.

Individuals with income below the new median can file under Chapter 7, while those above may need to consider Chapter 13.

🏠 Exemption Updates

Several states revised their bankruptcy exemptions in 2024. Many states increased the homestead exemption limits to account for inflation. This allows debtors to protect more equity in their homes during bankruptcy, which can be crucial for their financial recovery.

⏳ Automatic Stay Provisions

In 2026, amendments to the Bankruptcy Abuse Prevention and Consumer Protection Act extended the automatic stay period for certain debtors from 30 to 60 days. This provides additional time for individuals to manage their finances without collection actions from creditors.

💰 Current 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 fee is $313. Additionally, debtors must complete a credit counseling course costing between $20 and $50.

📌 Key Points Summary

  • 🏦 Means test changes affect eligibility for Chapter 7.
  • 🏡 Revised exemptions protect more home equity.
  • ⏰ Automatic stay extended to 60 days for some debtors.
  • 💵 Chapter 7 fee is $338; Chapter 13 fee is $313.
  • 🎓 Credit counseling course required, costing $20 to $50.

💡 Tips for Navigating Bankruptcy

Review your situation carefully with an attorney to understand how these changes affect you.

📝 Complete Required Courses

Before filing for bankruptcy, you must complete a credit counseling course. This course is essential for understanding your financial situation and is required by law.

📄 Gather Financial Documents

Collect all necessary financial documents before filing. This includes bank statements, income records, and a list of debts. Having everything ready can streamline the filing process.

⏲️ Know the Timeline

Understand the typical processing times for your bankruptcy type. Chapter 7 cases usually take about 3 to 6 months, while Chapter 13 can last 3 to 5 years due to repayment plans.

💳 Rebuilding Credit

After bankruptcy, rebuilding credit is possible. Consider obtaining a secured credit card. Making timely payments can help improve your credit score over time.

🔒 Understand Dischargeable Debts

Not all debts are dischargeable in bankruptcy. Student loans and certain taxes often stay with you. Knowing which debts can be discharged helps you plan for the future.

🏆 Ranked by User Reviews (2026)

This section highlights services related to credit repair and debt management, relevant to individuals considering bankruptcy. The information is based on Trustpilot data as of October 2026. Ratings can change based on customer experiences, and it's essential to consider various factors when assessing these services.

🥇 1. Lexington Law

Lexington Law has been rated 3.2. It is known for providing credit repair services and debt management. However, some reviewers report mixed experiences regarding service quality and have raised concerns about billing practices.

🥈 2. CreditRepair.com

CreditRepair.com holds a lower rating of 1.2. The service is also focused on credit repair and debt management. Numerous complaints about service quality and billing issues have been reported by customers, which may impact its reliability.

🆓 Free Government or Nonprofit Help

Approved credit counseling agencies offer free or low-cost services. These agencies are sanctioned by the U.S. Trustee Program and can help individuals understand their options before filing for bankruptcy.

Legal aid organizations in many states also provide free assistance to low-income individuals.

🔎 Choosing the Right Service

  • 💬 Read customer reviews and ratings for insights.
  • 📋 Assess the services provided and their relevance to your needs.
  • 💲 Compare costs and fees associated with different services.
  • ⚖️ Evaluate the quality of customer service and support offered.
  • 🕒 Consider the experience and expertise of the service providers.

❓ Frequently Asked Questions

❔ What is the means test?

The means test determines eligibility for Chapter 7 bankruptcy by comparing a debtor's income to the median income in their state. If the debtor's income is below the median, they qualify for Chapter 7.

📄 What are the filing fees for Chapter 13 bankruptcy?

As of October 2026, the filing fee for Chapter 13 bankruptcy is $313. This fee is separate from other costs like credit counseling.

📆 How long does Chapter 7 bankruptcy take?

Chapter 7 bankruptcy typically takes about 3 to 6 months from the filing date to the discharge of eligible debts.

🔍 Can I keep my retirement accounts in bankruptcy?

Most retirement accounts are protected from creditors during bankruptcy. However, protection levels can vary by state, so it's essential to check local laws.

🏚️ How does bankruptcy affect foreclosure?

Filing for bankruptcy can temporarily delay foreclosure proceedings. However, it does not necessarily prevent the loss of the home if the underlying debts remain unpaid.

🔄 What is a reaffirmation agreement?

A reaffirmation agreement allows debtors to keep certain debts after bankruptcy, agreeing to remain liable for those debts. This is common for secured debts like car loans.

⚖️ Recent Bankruptcy Cases

Recent court rulings have shed light on various aspects of U.S. bankruptcy law, particularly in relation to eligibility and dischargeable debts. These rulings reflect ongoing changes in the legal landscape surrounding bankruptcy.

For more information, feel free to browse recent rulings on the news page.

End of October 2026 Update





When an individual decides to file bankruptcy they should consider all pros and cons of the situation. The idea of bankruptcy is to protect an individual from further monetary damages. As such, if the option to file for bankruptcy is an option that makes thorough sense, it will fall under these categories:

No other option. After attempting to negotiate with creditors to find repayment plans and you are denied.

Liabilities exceed assets. When a person owes more to different companies than they have in their bank account.

Read this Before Filing for Bankruptcy

Want to keep your IRA. Money collected in the form of IRAs is saved whether or not an individual files for bankruptcy.

After bankruptcy is filed, a person may run into some negative things that can haunt them and their credit record. For example, after bankruptcy is filed, it stays on a person’s record for up to ten years. Other than feeling a mental and personal strain, after bankruptcy is filed, a person may not be able to borrow from other creditors.

Prior to deciding whether or not an individual should file bankruptcy, it may be advisable to contact a legal representative or a credit counselor. These individuals may be able to help create some sort of payment plan as well as suggest which type of bankruptcy to seek.  Regardless, it is important to consider the outcomes of each option when considering whether or not to file for bankruptcy.