How to File Bankruptcy in Maine: Chapter 7 vs 13 and Exemptions

To file bankruptcy in Maine, you submit a petition to the U.S. Bankruptcy Court for the District of Maine, which has locations in Portland and Bangor. Before that petition can be filed, you must complete an approved credit counseling session, decide whether Chapter 7 or Chapter 13 fits your situation, and prepare detailed schedules of your income, debts, and property. Filing triggers an automatic freeze on most collection activity and starts a process that either wipes out qualifying debts within a few months or restructures them into a three-to-five-year repayment plan.

Chapter 7 or Chapter 13

The two chapters solve different problems. Chapter 7 eliminates most unsecured debts quickly, usually within about four months, but a trustee can sell any property that Maine’s exemptions don’t protect. It fits people with limited income and few non-exempt assets who need a clean break.

Chapter 13 lets you keep your property in exchange for a court-approved repayment plan that runs three to five years.¹ You send monthly payments to a trustee who distributes them to creditors. This route works for people with steady income who have fallen behind on a mortgage or car loan and want to catch up while keeping the collateral. Chapter 13 also protects co-signers on your consumer debts from collection during the case, a protection Chapter 7 does not offer.²

Chapter 13 has debt limits. For cases filed on or after April 1, 2025, your secured debts must be under $1,580,125 and your unsecured debts under $526,700.³ Above those numbers, Chapter 13 is not available.

Do You Qualify for Chapter 7

Chapter 7 eligibility runs through the means test.⁴ The first step compares your average gross income over the six months before filing against Maine’s median income for a household your size. For cases filed between November 1, 2025, and March 31, 2026:

One earner: $73,946
Two-person household: $88,126
Three-person household: $104,083
Four-person household: $128,204

Add $11,100 for each additional household member beyond four.⁵ If your income is below the applicable median, you pass and can file Chapter 7. If it is above, the second step subtracts allowable living expenses, secured debt payments, and certain other costs. When the remaining disposable income is low enough, you still qualify. If it is not, the court presumes abuse and you will be directed toward Chapter 13.

Complete Credit Counseling First

You cannot file any bankruptcy petition until you finish a credit counseling session with an agency approved by the U.S. Trustee Program.⁶ The session reviews your finances, alternatives to bankruptcy, and a proposed budget. It runs about an hour and can be done online, by phone, or in person. The counseling has to happen within the 180 days before you file, and the certificate of completion is filed with your petition.⁷

A second course, debtor education, comes after filing. The two are not interchangeable.

What Maine Lets You Keep

Exemptions decide what property you protect from creditors. In Chapter 7, anything not covered by an exemption can be sold by the trustee. In Chapter 13, the value of your non-exempt property sets a floor for what your plan must pay unsecured creditors. Maine is an opt-out state, meaning you must use Maine’s own exemptions rather than the federal set. They are in Title 14, Section 4422 of the Maine Revised Statutes.⁸

Your Home

The homestead exemption protects up to $80,000 of equity in your primary residence. It rises to $160,000 if you are 60 or older, have a physical or mental disability that prevents substantial employment, or have minor children living with you.⁹ Married couples filing jointly can each claim the exemption when both have an ownership interest.

Your Vehicle

You can protect up to $10,000 of equity in one motor vehicle.⁹ If you owe more on the car than it is worth, there is no equity at risk and the exemption amount does not matter.

Personal Property

Maine caps several categories:

Household goods, clothing, appliances, books, animals, and musical instruments: up to $500 per item
Jewelry: up to $1,000 in general jewelry, plus up to $4,000 combined for wedding and engagement rings
Tools of the trade: up to $9,500 in tools, professional books, equipment, and materials for your business or profession

All from the same statute.⁹

Retirement Accounts

Tax-qualified retirement accounts (401(k), traditional and Roth IRA, 403(b), and similar plans) are protected up to $1,054,550 in aggregate. Contributions made within the 120 days before filing are excluded from this protection, which blocks last-minute shielding.⁹

Wildcard and Unused Homestead

A $500 wildcard exemption can be applied to any property. And if you do not use your full homestead exemption, up to $10,500 of the unused amount spills over to cover additional household goods, tools of the trade, or certain health aids.⁹ Renters without homestead equity often lean on this spillover to protect belongings that exceed the standard caps.

Documents to Gather

The petition and its schedules (A through J) require every detail of your financial life: property you own and its value, every creditor and the amount owed, income sources, and monthly expenses.¹⁰ A Statement of Financial Affairs covers recent transactions and property transfers.

Pull these together before you start:

Pay stubs from the 60 days before filing, plus income records covering six full months for the means test¹¹
Your most recent federal tax return, which must reach the trustee at least seven days before the 341 meeting
Recent statements for all checking, savings, and investment accounts
Current market values for vehicles and real estate; online tools handle cars, and real estate may call for a comparative market analysis
Recent statements or collection notices for every debt, including credit cards, medical bills, personal loans, and any judgments

The trustee cross-checks your schedules against these documents. Inconsistencies can stall your case, and in serious situations they can cost you the discharge.

Filing the Petition and What It Costs

You file with the U.S. Bankruptcy Court for the District of Maine. The court filing fee is $338 for Chapter 7 and $313 for Chapter 13.¹² Either fee can be paid in installments. In Chapter 7 only, you may apply for a full fee waiver if your household income is below 150 percent of the federal poverty guidelines and you cannot afford installments.

Attorney fees are the larger cost. A straightforward Chapter 7 typically runs $800 to $2,000. Chapter 13 tends to run $2,500 to $4,500 because the attorney’s work stretches across the entire plan, and many Chapter 13 attorneys fold their fee into the plan rather than collecting it upfront. Filing without a lawyer is permitted but risky, especially in Chapter 13, where drafting a confirmable plan requires familiarity with federal rules and local practice.

What Happens After You File

The Automatic Stay

The moment your petition is filed, the automatic stay takes effect and stops most collection activity.¹³ Creditors cannot continue lawsuits, garnish wages, call to demand payment, move a foreclosure forward, or repossess property. A creditor who violates the stay can be held in contempt.

The stay has limits. It does not stop criminal proceedings or the establishment and collection of domestic support obligations like child support and alimony. Tax audits can continue, though the IRS cannot collect while the stay is in place.¹³

The 341 Meeting of Creditors

After filing, the U.S. Trustee assigns a case trustee and schedules the 341 meeting, usually within a few weeks.¹⁴ Almost all 341 meetings in Maine are held virtually through Zoom. You attend, bring government-issued photo identification and proof of your Social Security number, and answer questions under oath about the accuracy of your schedules. Creditors are invited but rarely appear in routine consumer cases. The meeting usually takes 10 to 15 minutes if your paperwork is in order.

Debtor Education

Before the court grants your discharge, you must finish a second course called debtor education or personal financial management, again through a U.S. Trustee-approved provider.⁶ In Chapter 7, you file the certificate (Official Form 423) within 60 days after the first date set for the 341 meeting.¹⁵ In Chapter 13, it is due before your final plan payment. Miss the deadline and the court cannot enter your discharge.

Debts That Bankruptcy Will Not Erase

Bankruptcy wipes out many debts, but federal law carves out categories that survive regardless of chapter:¹⁶

Child support and alimony
Most recent tax debts; older income tax debts can sometimes be discharged if the return was due more than three years ago, was filed more than two years ago, and the tax was assessed more than 240 days before filing. Fraudulent returns and willful evasion disqualify the debt entirely.
Student loans, unless you file a separate adversary proceeding and prove undue hardship
Debts obtained through fraud, false pretenses, or a materially false financial statement
Debts from willful and malicious injury to another person or their property
Debts you fail to list, if the creditor did not receive notice in time to participate

When You Get Your Discharge

In Chapter 7, the court typically enters the discharge about four months after filing, once the 60-day objection window closes after the 341 meeting.¹⁷ Discharged debts are permanently eliminated and creditors are barred from ever collecting them. In Chapter 13, the discharge comes only after you complete all plan payments, three to five years after filing.

A bankruptcy filing can stay on your credit report for up to 10 years from the order for relief.¹⁸ In practice, the major credit bureaus remove Chapter 13 filings after seven years because the debtor repaid under a plan. Chapter 7 stays the full 10. The initial credit hit is steep but eases with time; many filers see meaningful improvement within two to three years by using secured cards and paying any remaining obligations on time.

If You Have Filed Before

Prior filings trigger mandatory waiting periods before a new discharge is available. The clock runs from the filing date of the earlier case:

Chapter 7 after Chapter 7: eight years – Section: 727(a)(8)[/mfn]³
Chapter 13 after Chapter 7: four years
Chapter 13 after Chapter 13: two years
Chapter 7 after Chapter 13: six years, unless you paid at least 70 percent of unsecured claims under a good-faith plan (no wait in that case)

Filing before the period runs does not block you from opening a case, but the court will deny the discharge. There is also a separate limit on the automatic stay for repeat filers: if a previous case was dismissed within the past year, the stay in your new case lasts only 30 days unless the court extends it, and a second prior dismissal within a year means no automatic stay at all without a court order.

1
United States Courts. Chapter 13 – Bankruptcy Basics
2
Office of the Law Revision Counsel. 11 USC 1301 – Stay of Action Against Codebtor
3
Office of the Law Revision Counsel. 11 USC 109 – Who May Be a Debtor
4
United States Department of Justice. Means Testing
5
United States Department of Justice. Median Income Table – November 1, 2025
6
United States Courts. Credit Counseling and Debtor Education Courses
7
United States Department of Justice. Frequently Asked Questions – Credit Counseling
8
Maine State Legislature. Maine Code Title 14 4426 – Exemptions in Bankruptcy Proceedings
9
Maine Legislature. Maine Code Title 14 4422 – Exempt Property
10
Legal Information Institute. Federal Rules of Bankruptcy Procedure Rule 1007
11
Office of the Law Revision Counsel. 11 USC 521 – Debtors Duties
12
United States Bankruptcy Court. Fees – United States Bankruptcy Court District of Maine
13
Office of the Law Revision Counsel. 11 USC 362 – Automatic Stay
14
United States Department of Justice. Section 341 Meeting of Creditors
15
United States Courts. Official Form 423 – Certification About a Financial Management Course
16
Office of the Law Revision Counsel. 11 USC 523 – Exceptions to Discharge
17
United States Courts. Discharge in Bankruptcy – Bankruptcy Basics
18
Office of the Law Revision Counsel. 15 USC 1681c – Requirements Relating to Information Contained in Consumer Reports