Chapter 7 bankruptcy filings generally provide the fastest way to get a fresh start for a person. This is done by discharging most unsecured debts such as:
- Credit card charges more than 90-days old that were incurred with good faith intent to pay for the services or products;
- Medical bills, medical lab expenses, dental bills that have not been paid;
- Some taxes;
- Unsecured guarantees and notes;
- Most judgments and garnishments;
- Repossession cost and debts; eviction; broken lease debts;
Normally everyday debt that has not been paid may be discharged if not made within the last 90 days of filing bankruptcy and if fraud is not involved. This also applies to past utilities, etc.
A Chapter 7 does NOT discharge certain taxes such as income taxes for years less than three years old and trust fund taxes, alimony, child support, student loans and credit charges within sixty days of filing bankruptcy and some other debts. If you are current with your payments on your car/truck loans and your home mortgage and you want to retain those items, you will need to continue making these monthly payments.
Usually, filing a Chapter 7 protects your house, vehicles, home furnishings, wages, retirement plans and life-insurance-cash value from creditors.
Background On Chapter 7 Bankruptcy
A chapter 7 bankruptcy case does not involve the filing of a plan of repayment as in chapter 13. This is why chapter 7 attorney fees are normally lower than a 13 filing. Instead, the bankruptcy trustee gathers and sells the debtor’s nonexempt assets and uses the proceeds of such assets to pay holders of claims (creditors) in accordance with the provisions of the Bankruptcy Code. Part of the debtor’s property may be subject to liens and mortgages that pledge the property to other creditors.
In addition, the Bankruptcy Code will allow the debtor to keep certain “exempt” property; but a trustee will liquidate the debtor’s remaining non- exempt assets.
Chapter 7 Bankruptcy Code provides for “liquidation,” (the sale of a debtor’s nonexempt property. The exempt property you can keep. If you retain me as your attorney I will tell you in advance of what property you may be at risk of losing and what property appears to be exempt. Even if you qualify for chapter 7 this may not be your best option based on all of the information you provide my office during our pre-bankruptcy review. Some other law offices don’t do them. It does NOT add to your overall cost of fees paid to my office.
Can you Qualify for Chapter 7?
To qualify for relief under chapter 7 of the Bankruptcy Code, the debtor may be an individual, married couple filing a joint petition, a partnership, or other business entity. They are subject to the means test described above for individual debtors, relief is available under chapter 7 irrespective of the number of the debtor’s debts or whether the debtor is solvent or insolvent.
An individual cannot file under chapter 7 or any other chapter including a Chapter 13, if during the preceding 180 days a prior bankruptcy, the prior petition was dismissed due to the debtor’s willful failure to appear before the court, comply with orders of the court, or the debtor voluntarily dismissed the previous case after creditors sought relief from the bankruptcy court to recover property upon which they hold liens.
You Must Complete Your Credit Counseling Class BEFORE FILING
In addition, no individual may be a debtor under chapter 7 or any chapter of the Bankruptcy Code unless he or she has, within 180 days before filing, received credit counseling from an approved credit counseling agency either in an individual or group briefing.
Exceptions to the credit counseling classes before filing. There are exceptions in emergency situations or where the U.S. trustee (or bankruptcy administrator) has determined that there are insufficient approved agencies to provide the required counseling. It is beneficial to get it taken as soon as possible and have it forwarded to my law office. If you complete the course online, print out a copy for your record then forward it to my office. If the counseling results in a debt management plan by the credit counseling agency, it must be filed with the court. This does not automatically exclude you from filing chapter 7.
Get A Fresh Start
One of the primary purposes of bankruptcy is to discharge certain debts in order to give an honest individual debtor a “fresh start.” Most of the people who came to me for bankruptcy representation, slowly got to the point when they just needed debt relief. They experienced a sudden change of circumstances that forced them into debt quickly which had a devastating effect on their ability to pay. Also, in the last year, a lot of credit card companies changed their minimum payment amount. This forced many people to file for bankruptcy. The interest rate soared to an extremely high amount along with additional late fees and over-limit fees.
The debtor has no liability for discharged debts. In a chapter 7 case, however, a discharge is only available to individual debtors, not to partnerships or corporations. 11 U.S.C. § 727(a)(1). Although an individual chapter 7 case usually results in a discharge of debts, the right to a discharge is not absolute, and some types of debts are not discharged.
How I Can Help You
When you have retained my office as your legal representative, I will personally meet with you and answer your questions. If you are not sure, I offer a free initial phone consultation. I want to explain bankruptcy to you and get the best possible results for you. Learn more at http://bnkut.com
Chapter 7 bankruptcy filings generally provide you with a fresh start. You may have suffered from circumstances, not in your control such as a loss of employment, unexpected illness or just made some not-to-sound financial decisions. I have been practicing law for 2o years. I believe that success can be measured by providing personal service and treating your clients with respect. You are not a number on some form but a real person. You deserve to be treated like one.