Delaware Bankruptcy Law
Bankruptcy Courts in Delaware
If you live in Delaware and are considering bankruptcy, your case will be handled in federal bankruptcy court. Delaware has one bankruptcy court district, based in Wilmington, which serves all counties—New Castle, Kent, and Sussex.
All bankruptcy cases in Delaware follow federal bankruptcy law, but the court also applies local rules and procedures that supplement those laws. Because these requirements can vary and change over time, it’s best to work with an experienced bankruptcy attorney who understands the local practices in your area. Court decisions follow guidance from the U.S. Court of Appeals for the Third Circuit Court of Appeals, which also covers New Jersey, Pennsylvania, and the Virgin Islands.
Where You File Depends on Where You Live
The District of Delaware covers all counties in the state—New Castle, Kent, and Sussex. All bankruptcy cases are filed in the U.S. Bankruptcy Court for the District of Delaware, located in Wilmington. The court handles both individual and business cases and operates under the same federal bankruptcy laws that apply nationwide.
Because Delaware has only one bankruptcy court, all hearings, trustee meetings, and filings occur through the Wilmington courthouse or electronically through the court’s online filing system.
If you’re unsure how or where to begin, an experienced bankruptcy attorney can guide you through the local procedures and ensure your case is filed correctly.
Bankruptcy Filing Trends in Delaware
Delaware processes several thousand bankruptcy cases each year. While Delaware is nationally recognized as a major venue for large corporate bankruptcies, many individuals and families also seek relief here under Chapter 7 and Chapter 13.
Chapter 7 filings remain the most common, allowing individuals to discharge unsecured debts such as credit cards and medical bills. Chapter 13 repayment plans are frequently used by homeowners who need time to catch up on mortgage payments or prevent foreclosure. These filings reflect how Delaware residents use bankruptcy to stop creditor actions and achieve long-term financial recovery.
Delaware Exemptions — What You Can Keep
Bankruptcy does not mean losing everything you own. Delaware law protects certain exempt property, which includes the things you need to live and work. These items are protected by law and cannot be taken or sold to pay creditors.
Delaware does not permit the use of the federal bankruptcy exemptions, meaning debtors filing in Delaware must use the state exemptions.
Below are examples of some of the most common Delaware exemptions:
| Type of Property | Amount You Can Protect (Individual / Joint) |
|---|---|
| Homestead – equity in a primary residence or manufactured home | $200,000 / $400,000 |
| Motor vehicle | $25,000 / $50,000 |
| Tools of trade – equipment or supplies necessary for work | $25,000 / $50,000 |
| Wildcard – any personal or real property (other than homestead) | $25,000 / $50,000 |
| Household goods, clothing, books, and burial plot | 100% |
| Sewing machine (not for hire) | 100% |
| Piano or organ (if rented or leased) | 100% |
| Personal property (head of family) | $500 / $1,000 |
| Wages and salaries – 85% exempt from garnishment | 85% |
| Retirement plans, life insurance, and annuities | 100% |
| College savings accounts (529 plans) | 100% |
| Public benefits (unemployment, workers’ comp, etc.) | 100% |
| Pensions (state, municipal, or volunteer firefighters) | 100% |
| Tenancy by the entirety (for joint real estate ownership) | 100% (in certain circumstances) |
These exemptions allow most filers to keep their homes, vehicles, retirement accounts, and other essential property. A bankruptcy attorney can help you apply them correctly and ensure maximum protection under Delaware law.
Steps and Local Requirements
Credit counseling. Before filing, you must complete a short credit counselling course from an approved provider. A second debtor-education course is required before discharge.
Means test. To qualify for Chapter 7, your household income must be below Delaware’s median income or pass a means test comparing income and necessary expenses.
Filing fees. The filing fee is $338 for Chapter 7 and $313 for Chapter 13. If you can’t pay the fee all at once, you can request to pay in installments or apply for a waiver.
Meeting of creditors. About a month after filing, you’ll attend a brief “341 meeting.” This is not held before a judge. Instead, a bankruptcy trustee will confirm your identity and review your financial paperwork.
In Delaware, meetings are typically held virtually or in person in Wilmington depending on your location and case type.
Local rules and forms. The court’s website lists all current local rules, procedures, and forms. Following them carefully helps your case move forward without delay.
What This Means for You
Filing for bankruptcy in Delaware can provide a fresh financial start and immediate relief from creditor pressure. The process stops most lawsuits, foreclosures, repossessions, and wage garnishments.
Most filers keep their homes, vehicles, and essential belongings. Because Delaware requires the use of state exemptions, and because exemption values are relatively high for homestead and personal property, it’s important to consult an experienced bankruptcy attorney before filing.
An attorney can help you:
- Decide between Chapter 7 and Chapter 13
- Apply Delaware’s exemptions correctly
- Complete the required credit-counseling courses
- File all forms accurately and meet local deadlines
With professional guidance, bankruptcy can help you rebuild your finances and regain long-term stability.