Chapter 7 Bankruptcy Explained
Chapter 7 Bankruptcy is a liquidation process that is often completed in as little as four to five months. It offers debt relief to those in unsustainable financial situations, regardless of how they got there. Chapter 7 Bankruptcy can stop repossessions, wage garnishments, calls from collectors, and even delay a pending foreclosure. It can be especially useful for those who have a lot of unsecured debts like credit cards, medical bills, and personal loans.
In almost all Chapter 7 Bankruptcy cases an automatic stay begins immediately after starting the process, halting suits filed by creditors and debt collectors in their tracks. The automatic stay can prevent a pending civil hearing, vehicle repossession, or even foreclosure sale for some time.
Bankruptcy filing can be a complicated process with many items that should be taken into consideration including, among other items, the Chapter 7 Bankruptcy means test, and exemption limits.
When filing for a Chapter 7 Bankruptcy you are allowed to keep certain types of property after certain state and federal exemptions are applied. The amount of exempt property that can be claimed varies from state to state. Any non-exempt assets are liquidated (sold) by the Chapter 7 Bankruptcy trustee to pay creditors. To avoid any potential liquidation, a trustee will often allow you to buy back any equity within a period of up to six months.
Although many sorts of unsecured debt will be legally discharged by Chapter 7 Bankruptcy, there are still some types of debt that can not be discharged in Chapter 7 such as:
- Income taxes less than three years old
- Back and future child support
- Student loans (in most cases)
- Property taxes
- Restitution and fines imposed by a court
- Spousal support
- Property settlement agreements obtained through a divorce.
Sometimes, in addition to eliminating the debt owed, we are able to sue creditors for illegal collection activity both during and after Bankruptcy. These type of action can provide up to $1000.00 to you in addition to paying related attorney fees and costs.
Contact us now to see how we can help you with filing Chapter 7 Bankruptcy.