📅 2026 Update: Key Changes in Bankruptcy Law

Since the original article on bankruptcy claims was written, there have been important updates. These changes affect various aspects of Chapter 7 and Chapter 13 bankruptcies, especially regarding eligibility and debt limits. The earlier article continues further down the page for more detailed information.

📈 Chapter 13 Debt Limits

As of March 31, 2028, the debt limits for Chapter 13 bankruptcy have increased. Individuals can have secured debts up to $1,580,125 and unsecured debts up to $526,700. This adjustment helps more people qualify for Chapter 13 bankruptcy, allowing them to reorganize debts while keeping their assets.

📝 Means Test for Chapter 7

To qualify for Chapter 7 bankruptcy, individuals must pass the means test. This test evaluates a person's income and expenses. It helps determine if they have enough disposable income to repay creditors.

This remains a crucial step in the bankruptcy process.

🛑 Credit Counseling Requirement

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

⏳ Processing Times

In Chapter 7 bankruptcy, most debtors receive a discharge of qualifying debts approximately four months after filing. For those in Chapter 13, repayment plans typically last between three to five years. These timelines are essential for individuals seeking quick resolutions or long-term plans.

📌 Key Points to Remember

  • 🏦 Chapter 13 debt limits are now $1,580,125 for secured and $526,700 for unsecured debts.
  • 📝 Individuals must pass the means test for Chapter 7 eligibility.
  • 🛑 A credit counseling course is required before filing.
  • ⏳ Chapter 7 discharges take about four months, while Chapter 13 plans last three to five years.

💡 Tips for Understanding Bankruptcy Options

It's important to review the details of your financial situation with an attorney. Understanding your unique circumstances can be critical when considering bankruptcy.

📊 Know Your Debt Limits

Be aware of the current debt limits for Chapter 13 bankruptcy. As of March 31, 2028, these limits are $1,580,125 for secured debts and $526,700 for unsecured debts. Knowing these figures helps you determine if you qualify.

📋 Complete the Means Test

If you are considering Chapter 7 bankruptcy, you must complete the means test. This test assesses your income and expenses to see if you have enough disposable income to repay creditors.

📅 Plan for Credit Counseling

Before filing for bankruptcy, make sure to complete a credit counseling course. You must do this through an approved agency within 180 days before filing. It can provide valuable insight into your financial situation.

⏱️ Understand Processing Times

Filing for Chapter 7 bankruptcy usually leads to a debt discharge within about four months. If you choose Chapter 13, be prepared for a repayment plan that can last three to five years.

🔄 Consider Conversion Options

If you start in Chapter 13 but find it challenging to meet repayment terms, you may have the option to convert to Chapter 7. However, this requires that you pass the Chapter 7 means test and may involve losing some nonexempt property.

🏆 Free Options Ranked by User Reviews (2026)

No national paid services met the review threshold for this topic, so this section lists free government and nonprofit resources. These organizations can help individuals understand bankruptcy and related issues.

🥇 1. Approved Credit Counseling Agencies

These agencies provide free or low-cost credit counseling. They help individuals understand their financial situation and explore bankruptcy options. Assistance is available for those who need guidance in managing their debts.

🥈 2. U.S. Trustee Program

The U.S. Trustee Program oversees bankruptcy cases and ensures that individuals fulfill their obligations. They provide resources for understanding the bankruptcy process.

Their aim is to protect the integrity of the system for everyone involved.

🥉 3. Federal Register

The Federal Register publishes updates on bankruptcy law, including adjustments to debt limits and eligibility criteria. This is a key resource for staying informed about current rules and regulations affecting bankruptcy.

4️⃣ Local Nonprofit Organizations

Many local nonprofits offer assistance with financial education and bankruptcy counseling. They provide resources to help individuals navigate their financial situations. These organizations often cater to specific community needs.

🔎 Things to Check Before Paying for Help

  • 📜 Verify credentials of any organization.
  • 💰 Confirm if fees are truly necessary.
  • 🗂️ Look for nonprofit status.
  • 📞 Read reviews from past clients.

❓ Frequently Asked Questions

🤔 What if I can't pay my debts after bankruptcy?

Bankruptcy can help discharge certain debts. However, some debts, like child support and most taxes, cannot be discharged. It’s essential to know what debts remain after bankruptcy.

📅 How long does bankruptcy stay on my record?

Bankruptcy can stay on your credit report for up to 10 years for Chapter 7 and 7 years for Chapter 13. This duration can affect your ability to obtain credit in the future.

🔍 Can I keep my house in bankruptcy?

In Chapter 13 bankruptcy, individuals can often keep their homes while repaying debts. The automatic stay provides temporary protection from foreclosure during the bankruptcy process.

📅 What happens to my credit score after bankruptcy?

Filing for bankruptcy will likely lower your credit score. However, many individuals can rebuild their credit over time by making timely payments and practicing sound financial habits.

🔄 Can I convert from Chapter 13 to Chapter 7?

Yes, you can convert from Chapter 13 to Chapter 7 if you meet the criteria for Chapter 7 eligibility. Ensure that you pass the means test and understand the implications of losing nonexempt property.

🏦 What type of debts can I discharge in Chapter 13?

In Chapter 13, you can discharge unsecured debts like credit card balances and medical bills after completing your repayment plan. Certain debts, such as most tax obligations and child support, are not dischargeable.

⚖️ Recent Court Rulings on Bankruptcy Cases

Recent court rulings have clarified various issues related to bankruptcy claims. These decisions can impact how debtors navigate their options and the outcomes of their cases.

Readers can browse more rulings on the news page to stay informed on the latest legal developments in bankruptcy law.

End of October 2026 Update





Debtor-creditor law does not only concern itself with
bankruptcy proceedings, but of course, this does not mean that it excludes them
from consideration either. As veterans of bankruptcy law understand, not every
legitimate bankruptcy claim made by creditors may be evaded on the
part of the debtor. Some debts are, by law, nondischargeable
debts, and thus, must be included with all payments to be made in a
rehabilitation/reorganization plan.



In attaching a priority to bankruptcy claims, it
would make sense that these types of debts would be highest up on the list.
Indeed, first on this list is the need of the debtor to cover all monthly
domestic support charges. Following that are administrative expenses incurred in legal appeals for bankruptcy
and claims related to the debtor’s normal business operations.

Priority of Claims in Bankruptcy


As with the policy on dischargeability of debts,
bankruptcy claim priority is spelled out in Subchapter 5 of the Bankruptcy Code. The next category of bankruptcy
claims that one would be able to assign in the Section 507 priority
compendium revolves around a realization of the person's livelihood. One
such bankruptcy claim is that of wages and sales commissions for regular
income earners, but only to a maximum of $10,000. Another governs planned
contributions to an "employee benefit plan." 



As for the remaining claims on the priority list, they
are harder to categorize, but they still have their place in the grand scheme
of things. The seventh claim named in Section 507 is monies intended for use in
securing a piece of real estate. Bankruptcy claims of the eighth and ninth
order invoke the Federal Government
as creditor, in particular, certain kinds of taxes and commitments to "a
Federal depository institution’s regulatory agency (or predecessor to such
agency) to maintain the capital of an insured depository institution." The
final bankruptcy claim echelon is restitution for damages incurred in operating
a land or sea vehicle while intoxicated.