Bankruptcy / Chapter 7

Chapter 7 Bankruptcy: 3 Things You Need to Know

Written by Ben Tejes
Updated Oct 11th, 2023
This article is for informational purposes only. Ascend does not provide legal advice, and are not attorneys. If you'd like to speak with a bankruptcy attorney that serves your city, you can speak with one in a free consultation.

You are deciding whether to file bankruptcy. The purpose of this article is to allow you to estimate bankruptcy qualification, give you access to free bankruptcy evaluation with a local attorney, and explain how the bankruptcy costs and bankruptcy process work.

1) Estimate Bankruptcy Qualification and Get Free Local Attorney Evaluation

Understanding whether you qualify for a Chapter 7 bankruptcy may be one of the most important steps to understand what you should do. The good news is that we built the following bankruptcy calculator that simulates the actual means-testing bankruptcy forms.

Secondly, you will often want to get a free evaluation with a local attorney, which you can request below as well. There may be a high variability of attorney competency, so it may be helpful to see the 5 things that we look for in the bankruptcy attorneys we work with, which are 1) Referral 2) Reviews 3) Relevancy 4) Rates 5) Reliability.

2) Understand Attorney Fee and Costs

Most people are considering bankruptcy because they cannot afford their debts, so coming up with attorney fees and filing fees may seem daunting.

The good news is that bankruptcy attorneys understand that and often work with you in a payment plan. I'd recommend you read our article titled bankruptcy lawyer fees to get a deeper understanding of how the costs work, but the gist of it is that attorney fees are based on:

  1. Chapter 7 or Chapter 13 Attorney Fees
  2. The complexity of the bankruptcy case
  3. Your location may dictate the bankruptcy lawyer fees
  4. Level of attorney connection
  5. Bankruptcy attorney expertise may indicate fee amount

I'd argue that a 6th option is the ability to pay and financial need. In addition to the attorney fees, you may also have to pay the Chapter 7 filing fees, which are between $300-$400.

3) Chapter 7 Bankruptcy Process

You have experienced a financial hardship and are now considering bankruptcy. Amidst the potential stress, you are now tasked with role to understand the bankruptcy process in addition to what to expect from an attorney and the fees that will be charged.  It’s often a difficult season of life, so hopefully, we can relieve some of the potential anxiety by providing this simple understanding of the Chapter 7 bankruptcy process. Thankfully the Chapter 7 bankruptcy process can be more straightforward than the Chapter 11 bankruptcy and Chapter 13 bankruptcy process.

Before we begin

We help thousands of people every year decide whether a Chapter 7 bankruptcy, Chapter 13 bankruptcy, debt settlement or debt management is right for them. When people commit to a Chapter 7 bankruptcy, they are often confused about the process and the fees. As such, we build a "step by step" bankruptcy decisioning platform to guide you through the process. It will provide such information as costs of filing bankruptcy and how to find a bankruptcy attorney. Get access to the free platform below.

Okay, let's now go through each step of Chapter 7 bankruptcy, so you can know how everything works.

Step 1: Do you Qualify for a Chapter 7 bankruptcy

As said above, you are considering a Chapter 7 bankruptcy, and you first want to understand whether you qualify. Unlike Chapter 13, you have to qualify for a Chapter 7 bankruptcy through means-testing. We developed a Chapter 7 calculator to estimate whether you qualify for you.

Step 2: Decide whether you will file a Chapter 7 bankruptcy

If you qualify for a Chapter 7, the next step is to determine whether to follow through with a Chapter 7 bankruptcy or pursue something else.  It can be helpful to understand an extensive list of bankruptcy pros and cons.

The main alternatives to a Chapter 7 bankruptcy are: 

Step 3: Decide whether to hire an attorney

A Chapter 7 bankruptcy is often less complicated than the Chapter 13 Bankruptcy. It is possible to do a Chapter 7 bankruptcy without an attorney. There are often things that an attorney can help with that would not be easily understood, but this is an important step to determine.

If you decide to hire an attorney, it’s important to understand the attorney fees and how to select a reputable attorney. We use this guide to help us determine who to allow into our attorney network. 

If you decide not to hire an attorney, we found that NOLO provides an interesting how-to guide to file a Chapter 7 bankruptcy on your own. It would also be helpful to read the US Government post titled, “Filing Without an Attorney” before pursuing that route.

Step 4: Get a mandatory Credit Counseling Course

There are two mandatory credit counseling courses that you have to do to be able to complete your Chapter 7 bankruptcy. The first course is a pre-bankruptcy credit counseling course and the second is the pre-discharge debtor education

Step 5: File Petition and Other Forms

There are a variety of bankruptcy forms that are required for you to start the process. The required forms to be completed that  make up the petition are the financial affairs and schedules:

  • List of all creditors and the amounts of the claims
  • The source of your income including the amount and frequency
  • All of the property you own
  • A detailed list of your monthly living expenses

Step 6: Trustee is assigned to the case

A Chapter 7 Trustee is assigned to your case to review your paperwork and look into the nonexempt property that you may have. You may have to submit forms such as a recent tax return to the trustee. If you have nonexempt property, the trustee may manage the sale and liquidation of that property.

Step 7:  The 341 Meeting of Creditors Takes Place

I have been to a number of 341 Meetings, and I have never actually seen a creditor show up. This meeting is generally between your attorney (if you hired one) and you and the Chapter 7 trustee where he/she will ask a series of questions. The meeting can last under 15 minutes.

Chapter 7 Eligibility Confirmation:

After the 341 meeting, the Chapter 7 trustee has often gathered enough information to know whether they will liquidate any of your assets. The trustee will often decide what to do with the non-exempt property at this point and whether it’s worth it to them to liquidate. They often do this by understanding the retail value of the asset and whether that asset will actually sell.

The secured debts will also need to be dealt with at this point in the process. The options are often to give up the  asset or potentially reaffirm the debt on the asset, which is common for vehicles.

Step 8: Take second mandatory debt education course

You must take the second mandatory debt education course before filing for discharge. You will receive a certificate of completion and your attorney or you would add that into your filing showing the proof of completion. Once filed, the last step is to wait to receive your discharge.

Step 9: Receive your discharge

You have completed all of the necessary steps, and now it’s time to wait for the Chapter 7 bankruptcy discharge. You should receive your bankruptcy discharge in the mail. It can be with three to six months of the filing date. 


There are often many bankruptcy misconceptions that we address, but the gist is that bankruptcy is the right solution for many people. Use the free bankruptcy decisioning portal to help you understand the bankruptcy process, costs, qualifications, and alternatives.

Now it’s time to get on with your life after much of your debt has been cleared. We always love to hear from our readers, so feel free to comment below or shoot us an email if you have any suggestions.