📅 2026 Update: Changes in Personal Bankruptcy and Employment

Since the original article was written, there have been notable updates regarding personal bankruptcy under U.S. law. These changes affect various aspects such as Chapter 13 bankruptcy processes, the means test, and costs associated with filing. The earlier article continues further down the page for more detailed information.

📜 Chapter 13 Bankruptcy Plan Confirmation Changes

As of January 2025, the U.S. Bankruptcy Court for the Southern District of New York introduced a new electronic filing system. This change aims to make the Chapter 13 bankruptcy plan confirmation process smoother for both debtors and creditors.

The electronic system reduces paperwork and speeds up confirmations.

💰 Updated Costs for Filing Bankruptcy

The costs to file for bankruptcy have remained consistent as of October 2026. The filing fee for Chapter 7 is $338, while Chapter 11 is $1,738, and Chapter 13 is $313. These fees are set by the U.S.

Bankruptcy Court and may change in the future.

📝 Important Forms and Steps

Debtors still need to complete official forms like the Voluntary Petition and Schedules A-J. After filing, they must attend the 341 Meeting of Creditors and finish a debtor education course. This process remains essential for both Chapter 7 and Chapter 13 bankruptcies.

⏳ Processing Times

For Chapter 7 bankruptcy, the timeline is typically 3 to 6 months from the filing date to discharge. Chapter 13 usually takes longer, spanning 3 to 5 years, depending on the repayment plan. Being aware of these timeframes is crucial for debtors.

📌 Key Points Summary

  • New electronic filing system for Chapter 13 confirmations.
  • Filing fees: Chapter 7 ($338), Chapter 11 ($1,738), Chapter 13 ($313).
  • Required forms include the Voluntary Petition and Schedules A-J.
  • Processing times: Chapter 7 (3-6 months), Chapter 13 (3-5 years).
  • Important steps include attending the 341 Meeting of Creditors and finishing a debtor education course.

💡 Tips for Navigating Personal Bankruptcy

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

🕒 Understand the Automatic Stay

When you file for bankruptcy, an automatic stay goes into effect immediately. This halts most collection actions, providing relief from repossessions and wage garnishments. Understanding this can help you feel more secure during a difficult time.

📑 Complete Required Education

Before and after filing, debtors must complete credit counseling and debtor education courses. These courses help individuals understand their financial situation and are a requirement for discharging debts.

🕵️‍♂️ Know Your Exemptions

Each state has exemption laws that determine what assets are protected during bankruptcy. Familiarizing yourself with these laws can help you retain essential property during the bankruptcy process.

📅 Keep Track of Deadlines

Deadlines are crucial in bankruptcy. Credit counseling must be completed within 180 days before filing, and debtor education must be done before receiving a discharge. Missing these deadlines can complicate the process.

💳 Monitor Your Credit After Discharge

Bankruptcy affects your credit score, staying on your report for 7 years (Chapter 13) or 10 years (Chapter 7). After your discharge, it’s important to monitor your credit and take steps to rebuild your score.

🏆 Ranked by User Reviews (2026)

This section covers services that help with credit repair and related issues, which are crucial for those affected by bankruptcy. The order follows Trustpilot data checked in October 2026, and scores can change over time. Reviewers often leave more feedback when they are unhappy, which can affect the average scores.

🥇 1. Lexington Law

Lexington Law has been rated 3.2 on Trustpilot. It is known for providing credit repair services and helping clients dispute items on their credit reports. However, reviewers have shared mixed experiences, with some complaints about service quality and effectiveness.

🥈 2. CreditRepair.com

CreditRepair.com holds a Trustpilot score of 1.2. This service is recognized for its focus on credit repair and assistance in improving credit scores. However, numerous negative reviews highlight issues with billing practices and customer service, which may concern potential users.

🆓 Free Government and Nonprofit Help

Approved agencies offer credit counseling and debtor education, with some providing free or low-cost options. These services can help individuals navigate the bankruptcy process without added financial stress.

🔎 What to Compare When Choosing a Service

  • 💬 Customer reviews and overall ratings
  • 💸 Pricing and available payment plans
  • 📞 Accessibility of customer support
  • 🏅 Services offered related to credit repair
  • 📑 Educational resources provided to clients

❓ Frequently Asked Questions

❓ What is the means test for Chapter 7?

The means test compares 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 bankruptcy; if it's above, they may have to consider Chapter 13.

⚖️ How long does bankruptcy stay on my credit report?

Bankruptcy remains on your credit report for 7 years if you filed for Chapter 13, and for 10 years if you filed for Chapter 7. This can significantly impact your credit score and borrowing ability.

🔒 Can I keep my home if I file for bankruptcy?

Whether you can keep your home depends on your state's exemption laws. If your equity in the home is below the exemption limit, you may be able to retain it during bankruptcy.

📆 What happens to my debts after bankruptcy?

In Chapter 7, most unsecured debts are discharged, meaning you are no longer responsible for them. In Chapter 13, debts are restructured, and remaining unsecured debts may be discharged after completing your repayment plan.

🕵️‍♀️ Will bankruptcy affect my job search?

While federal law prohibits discrimination based on bankruptcy status, some employers may still consider it during hiring decisions. It’s important to be prepared to discuss it if it comes up in your job search.

📚 Is there free help available for bankruptcy?

Yes, there are approved agencies that offer free or low-cost credit counseling and debtor education. These services can guide individuals through the bankruptcy process without incurring high costs.

⚖️ Recent Court Rulings on Bankruptcy Cases

Recent court rulings have addressed various aspects of personal bankruptcy, influencing how laws are applied in employment and debt recovery.

Browse more rulings on the news page for updates on recent cases.

End of October 2026 Update





There may be various different reasons why an individual cannot make ends meet. The most common reasons that people experience a financial crisis and take part in declaring bankruptcy is because they were fired from their job, let go because of cuts, or were unable to find employment.

Bankruptcy and employment often create a vicious cycle. The individuals who are most in need of employment are the people who are experiencing severe financial debt and the individuals who have declared bankruptcy. However, declaring bankruptcy may have a very detrimental effect on an individual's ability to find and obtain employment.

This creates various complications because the inability to pay debts is what has caused an individual to file for bankruptcy, and employment may be the only effective way to pay debts. If an individual cannot obtain and maintain a steady income, then it will be natural for them to suffer from financial hardships again in the future.

Learn the Effects of Personal Bankruptcy on Employment

There are many adverse effects to declaring bankruptcy. One of the most harmful consequences is the increased difficulty that an individual will face while trying to obtain a job. Obviously, then, an individual who is considering declaring bankruptcy should consider the effects that it will have on his or her ability to find a job.

Many companies and organizations perform background checks and review credit reports. In addition, an individual declaring bankruptcy will usually not be permitted to obtain a security clearance, which may prevent him/her from working in a government position.

To boot, if a government employee has a security clearance at the time that he or she files for bankruptcy, then the clearance may be revoked. Though they cannot be fired, an individual may experience problems at work as a result of declaring bankruptcy and employment advances may be refused.

Someone who has gone bankrupt may be denied promotions or position reassignment. If they work in a position in which they must handle money or company finances, they may be transferred to a different position within the company.