Filing Chapter 7 bankruptcy can wipe out credit card debt and sweep all forms of unsecured debt into the garbage, if done properly.
Debts That Can't Be Discharged
Special debts like child support, alimony and student loans, will not be eliminated when filing for bankruptcy. Not all debts are treated the same. The law takes some debts very seriously and these cannot be wiped out by filing for bankruptcy.
However, exempt property in a California bankruptcy is generally described as:
Cons of Filing Chapter 7 Bankruptcy
Most Chapter 7 bankruptcies do not include any assets, and there is no property that can be liquidated in order to pay off creditors. Credit card debt is often non-priority, unsecured debt, which likely will be discharged without being paid in full.
What can you not do in a Chapter 7 bankruptcy?
The main cons to Chapter 7 bankruptcy are that most secured debts won't be erased, you may lose nonexempt property, and your credit score will likely take a temporary hit. Filing for bankruptcy is a very effective way to eliminate debt and get a fresh start.
To qualify for Chapter 7 bankruptcy in California, your income must be below the state's median income for your household size. For example, as of 2025, the monthly income limit is $5,030 for a single-person household and $8,620 for a four-person household.
What can you not do after filing Chapter 7 bankruptcy?
While creditors cannot harass you once you file for bankruptcy, they might intensify their collection efforts before you do. This can include frequent phone calls, letters, and even threats of legal action. If you're facing creditor harassment, consult with an experienced bankruptcy attorney.
Non-Exempt Funds in Checking Accounts
A trustee can ask a bank to unfreeze an account if it contains exempt funds. An individual filing for bankruptcy under Chapter 7 may face an account freeze by a bank. You can let the bankruptcy trustee know about the freeze and ask them to get the bank to release the freeze.
Most Chapter 7 debtors receive their debt discharge about four to six months after filing, making Chapter 7 the fastest bankruptcy chapter to complete. In most cases, the court enters the discharge order about 60 to 90 days after the 341 meeting of creditors.
Most chapter 7 cases involving individual debtors are no asset cases. But if the case appears to be an "asset" case at the outset, unsecured creditors (7) must file their claims with the court within 90 days after the first date set for the meeting of creditors.
How to Get Rid of $30k in Credit Card Debt
Once the 7 or 10 years pass and the bankruptcy filing is removed from your credit report, your credit score will increase by 50 to 150 points. The ultimate increase in your credit score will also depend on the presence of other negative information in your credit report.
In general, you must wait: Two years after your discharge date for Chapter 7 bankruptcy for FHA loans and VA loans. Three years after your discharge date for Chapter 7 bankruptcy for USDA loans. One year after your discharge date for Chapter 13 bankruptcy for FHA loans, VA loans, and USDA loans.
Not All Debts Are Discharged
Certain debts will remain on your account when you file for Chapter 7 bankruptcy. You will still be responsible for alimony and child support. Tax liens, student loans, and personal injury debts caused by intoxicated drivers are still in effect, as well.
Here's what you need to know to avoid the most common pitfalls and ensure a smoother bankruptcy process.
Although a bankruptcy filing remains on your credit report for eight to ten years, the impact diminishes over time. So, while you can expect many landlords to be reluctant to rent to you during the two years immediately after your bankruptcy case, the situation will improve.
It's not a good idea to empty an account and hide the funds to avoid paying creditors. Hiding assets from bankruptcy creditors, including hiding savings account funds, is a fraudulent act with stiff penalties. Fortunately, appropriate ways to protect savings accounts before filing for bankruptcy exist.
Banks would much rather you not file for bankruptcy when you're in need of debt relief. They'd rather steer you toward other debt settlement options that could more benefit them. The bank may nudge you toward things like payday loans, maxing out all credit options, or borrowing money from family and friends.
The bankruptcy trustee typically asks for the most recent 2–3 months of bank statements, but they have the authority to request more if needed. In most Chapter 7 cases, trustees review statements from the 60–90 days before your filing date to verify your balance, income deposits, and spending patterns.
The Means Test:
If your income exceeds the median, you may not qualify for Chapter 7 and may be required to file for Chapter 13 bankruptcy instead. For example, as of 2025, the median income for a family of one in California is $76,190, and for a family of four, it is $130,845.
It's not a regularity, but it does happen. Sometimes, a creditor files a lawsuit on debt, that was discharged in your Chapter 7 Bankruptcy. In most instances, this isn't supposed to happen! You're not supposed to be sued after bankruptcy on discharged debt!