When debt keeps growing despite your best efforts, it can become difficult to see a way forward. Credit-card balances, medical bills, personal loans, lawsuits, wage garnishments, and missed mortgage payments can quickly overwhelm a household.
Bankruptcy may provide a legal path toward relief, but filing is a major decision with consequences for your property, debts, and credit. American Law Link’s bankruptcy attorney referral network can connect you with a California attorney who can review your circumstances, explain your options, and help you determine whether bankruptcy makes sense for you.
When Debt Becomes More Than You Can Manage
You may have reached the point where minimum payments barely reduce your balances, or where you simply cannot pay every creditor each month. You may be worried about losing your home or car, facing a lawsuit, or having your wages garnished.
You are not alone. Nationwide, 574,314 bankruptcy cases were filed during 2025, including 549,577 non-business cases. That represented an 11.2% increase in non-business filings from the previous year.
Bankruptcy exists to give qualifying individuals a structured way to address debts they can no longer manage. Depending on the chapter you file, it may eliminate certain debts, reorganize others, stop many collection efforts, or give you time to catch up on secured obligations.
The important question is not simply, “Can I file bankruptcy?” It is, “What would bankruptcy actually do in my situation?”
What Happens to Your Debts in Bankruptcy?
For individuals, Chapter 7 and Chapter 13 are two of the most common forms of bankruptcy.
Chapter 7 can discharge many unsecured debts, meaning you are no longer personally responsible for paying qualifying obligations after discharge. A Chapter 7 discharge commonly occurs about four months after filing, although every case is different.
Chapter 13 allows an individual with regular income to propose a repayment plan, generally lasting three to five years. It can be particularly useful in situations where someone wants to keep property or catch up on mortgage arrears.
Filing either type of bankruptcy generally triggers an “automatic stay.” The stay stops most collection activity, including many lawsuits, garnishments, and collection calls, although important exceptions apply.
Bankruptcy does not erase every debt. Nondischargeable obligations can include certain taxes, child or spousal support, most government-funded or guaranteed student loans, and debts arising from certain wrongful conduct. Secured creditors may also retain valid liens against property even when your personal liability for a debt is discharged. That is one reason that individualized legal advice matters.
Will You Lose Your Home, Car, or Other Property?
Filing for bankruptcy does not automatically mean losing everything you own. California provides exemptions that can protect qualifying property from creditors and the bankruptcy estate. California debtors have different exemption systems, and selecting the appropriate system can substantially affect what property is protected. For example, California provides exemptions for specified amounts of equity in residences, vehicles, household goods, tools of the trade, certain benefits, and other property.
California also provides a homestead exemption based on the exemption on the prior year’s countywide median sale price for a single-family home, subject to statutory minimum and maximum amounts that are adjusted annually for inflation.
Because exemption planning can be complicated and mistakes can put valuable property at risk, consider speaking with a bankruptcy attorney before transferring, selling, or giving away assets.
Do You Qualify for Bankruptcy?
Qualification depends on the chapter and your individual financial circumstances. For Chapter 7, many consumers encounter the bankruptcy “means test,” which considers income and certain permitted expenses. The U.S. Trustee Program publishes state median-income figures and expense standards used in the applicable bankruptcy forms. The figures and standards are periodically updated, so eligibility should be evaluated using the data applicable on the filing date.
Chapter 13 has different requirements and generally requires regular income sufficient to support a proposed repayment plan.
Income alone does not tell the whole story. Your debts, assets, household expenses, previous bankruptcies, secured obligations, and financial goals may all affect which options are available.
What Will Bankruptcy Do to Your Credit?
Bankruptcy can have a significant negative effect on your credit, particularly in the short term. According to the Consumer Financial Protection Bureau, bankruptcy information can generally remain on a credit report for up to 10 years.
But credit impact should be considered in context. Someone already missing payments, carrying high balances, or facing collections may already have damaged credit. A bankruptcy attorney can help you weigh the long-term consequences of filing against the likely consequences of continuing with debt you cannot realistically repay.
Why Use a Bankruptcy Attorney Referral Network?
Finding a lawyer can be difficult when online search results, advertisements, and directories give you little information about whether an attorney is actually suited to your case.
California has long recognized the value of connecting clients with attorneys who have relevant experience. The State Bar likewise explains that certified referral networks can connect consumers with lawyers experienced in the appropriate field, in good standing, and carrying professional liability insurance.
How American Law Link Helps
American Law Link is designed to make finding appropriate legal help simpler. There is no extra cost to consumers for using the referral network, and you are not obligated to hire an attorney simply because you receive a referral.
American Law Link screens its participating attorneys using experience and professional-history criteria and requires panel attorneys to carry malpractice insurance. Its goal is not simply to send your name to a lawyer, but to identify an attorney whose experience aligns with the problem you are facing.
American Law Link can also remain an independent point of contact. If concerns arise, consumers can reach out again regarding the referral or case progress, and the service may request information from participating attorneys consistent with applicable confidentiality and professional responsibility requirements. Choosing the right bankruptcy path and the right attorney to help you pursue it can affect your finances for years.
Find out What a Fresh Start Could Look Like
You do not have to decide whether to file bankruptcy before speaking with a lawyer.
Start by telling American Law Link what you are facing. Through our bankruptcy attorney referral network, we can help connect you with an experienced California bankruptcy attorney who can evaluate your debts, income, assets, and goals.
The next step is simply getting informed. Contact American Law Link today for a bankruptcy attorney referral and learn which options may help you move forward.
Legal References Used to Inform This Page
To ensure the accuracy and clarity of this page, we referenced official legal resources during the content development process:
