Who can file for Chapter 7 or Chapter 13?
Eligibility turns mainly on three things: your income, how much you owe, and whether you've been through bankruptcy before.
A short course from an approved agency, completed within 180 days before filing. It can usually be done online or by phone.
If a prior bankruptcy case was dismissed within the last 180 days, you may need to wait before filing again.
Qualifying depends mainly on income.
If your average household income over the six months before filing, annualized, is below the North Carolina median for your household size, you generally qualify.
A more detailed means test subtracts allowed living expenses and certain debt payments from your income. If what's left is low enough, Chapter 7 is still available.
If most of what you owe comes from a business rather than personal or household spending, the means test may not apply at all.
Median income figures are set by the U.S. Department of Justice and updated periodically.
Qualifying depends on steady income and total debt.
Income steady enough to make monthly plan payments for three to five years — wages, self-employment, retirement, or benefits can all count.
Your debts must be below both limits:
People, including sole proprietors, can file Chapter 13. Corporations and LLCs cannot.
My practice currently handles Chapter 7 cases. If Chapter 13 is a better fit for you, I'll tell you and help you find counsel who handles it.
Debt limits apply to cases filed April 1, 2025 through March 31, 2028.
If you've received a discharge before
You can file again, but you won't receive a new discharge until enough time has passed. The waiting period runs from the filing date of the earlier case to the filing date of the new one.
| Earlier case | New Chapter 7 | New Chapter 13 |
|---|---|---|
| Chapter 7 | 8 years | 4 years |
| Chapter 13 | 6 yearsShorter in some cases | 2 years |
Wipe out qualifying debt and start over, usually in about four months.
Chapter 7 erases most credit card, medical, and personal loan debt. A trustee reviews your case, but North Carolina's exemptions often protect everything a filer owns.
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Day one
File your case
Your petition and financial schedules are filed with the bankruptcy court.
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Immediately
Collection stops
The automatic stay halts most calls, wage garnishments, lawsuits, and foreclosures.
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About a month in
Meeting with the trustee
A short meeting where the trustee asks questions under oath. I attend with you.
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About 3 to 4 months in
Debts discharged
The court enters your discharge, and the covered debts are permanently wiped out.
Along the way: you'll complete a short financial management course after filing, separate from the credit counseling course taken before. Some debts, such as child support, recent taxes, and most student loans, generally aren't discharged.
Your discharge is a fresh start. Here's what to know going forward.
Most debts are gone for good once the court enters your discharge. A few things still need your attention in the months and years after.
What's protected
Collection on discharged debts must stop
Creditors can't call, sue, garnish, or otherwise try to collect a discharged debt. The protection is permanent.
Your job and licenses
Government agencies can't deny a license or public job, and employers can't fire you, solely because you filed bankruptcy.
Rebuilding your credit
About two months after discharge, check your credit reports. Discharged accounts should show a zero balance; dispute any that don't. The bankruptcy itself can appear for up to ten years, but on-time payments start rebuilding your score right away.
What still needs attention
Debts that survive
Child support and alimony, most student loans, recent taxes, and any debt you reaffirmed are still owed. Keep paying them.
Loans on a home or car you kept
Your personal liability may be gone, but the lender's lien stays on the property. Keep making payments, or the lender can still foreclose or repossess.
Stay in touch until your case closes
The trustee may still be handling assets or claim part of a tax refund. And if you become entitled to an inheritance, life insurance payout, or divorce property settlement within 180 days after filing, tell me right away — even if you've already been discharged.
It's your proof that a debt was wiped out. If a creditor contacts you about a discharged debt, don't pay. Send them a copy, and contact me.