Filing Chapter 7
Chapter 7 bankruptcy is a liquidation proceeding. The debtor turns over all nonexempt property to the bankruptcy trustee, who then converts it to cash for distribution to the creditors. The debtor receives a discharge of all dischargeable debts.
Who can file a Chapter 7 bankruptcy?
- You must reside or have a domicile, a place of business, or property in the United States or a municipality.
- You must not have been granted a Chapter 7 discharge within the last 6 years or completed a Chapter 13 plan.
- You must not have had a bankruptcy filing dismissed for cause within the last 180 days.
- It must not be a "substantial abuse" of Chapter 7 to grant the debtor relief. Generally speaking, if after you pay the monthly expenses for necessities there is not enough money to pay the remaining monthly debts, then granting a discharge would not be an abuse of Chapter 7.
- It would not be fundamentally unfair to grant the debtor relief under Chapter 7.
Is it true that I can wipe out all my bills?
The underlying policy of bankruptcy law is that the honest debtor who is in debt beyond his/her ability to repay the debt should be given a fresh start through the discharge of debts in a bankruptcy proceeding. Not all debts are dischargeable. Generally speaking, the following debts will not be discharged: Taxes; Spousal and Child Support; Debts arising out of willful misconduct and or malicious misconduct by the debtor; liability for injury or death from driving while intoxicated; no dischargeable debts from a prior bankruptcy; Student loans; Criminal fines and penalties and Forfeitures. Those debts which are secured will be discharged, however, expect the creditor to take the necessary legal steps to take back the property. In most cases if the debtor's equity interest in the property is exempt, the debtor may retain the property by redemption or reaffirmation.
What are the most common reasons for a Chapter 7 bankruptcy?
The most common reasons for consumer bankruptcy are: Unemployment; large medical expenses; seriously over extended credit; marital problems and other large unexpected expenses.
Can I stop the bill collectors from calling?
One of the major benefits of filing for protection under Chapter 7 is that many creditor actions are stayed. This means that debt collection efforts and foreclosure is halted.
How long after I file will the creditors stop calling?
Once a creditor or bill collector becomes aware that you have filed for bankruptcy protection, he/she must stop all efforts to collect the debt. After your bankruptcy is filed, the court mails a notice to all the creditors listed in your schedules. This usually takes a couple of weeks. If this is not soon enough, then you should have your representative inform the creditor immediately. If a creditor continues to use collection tactics once informed of the bankruptcy they may be liable for court sanctions and attorney fees for this conduct.
I am married, does my spouse also have to file bankruptcy?
No. In some cases where only one spouse has debts, or one spouse has debts that are not dischargeable then it might be advisable to have only one spouse file. In cases where real property is involved the question regarding a joint bankruptcy is beyond the scope of this FAQ, see an attorney.
Will I lose my job?
No. Bankruptcy laws prohibits discrimination based upon a debtor filing for protection under the bankruptcy laws.
What happens to my personal property, real property and other assets?
Once the bankruptcy is filed, all the property of the debtor at the time of the filing and certain other property to be received in the future, becomes the property of the bankruptcy estate. This means that the bankruptcy trustee will take control of this property for purposes of satisfying the creditors. HOWEVER, there is certain property which is either excluded or exempt and the debtor will be able to keep it. Property or asset exemption are determined based upon your situation, income and the laws of your state. The best way to determine which property to keep requires a detailed analysis of your situation. You need a good lawyer. Don't pick one that advertises in your local paper.
Got more questions?
- Got more questions?
- Can I keep my home and personal property?
- Can I keep my car after bankruptcy?
- Can I keep my house after bankruptcy?
- Can I keep my credit cards after bankruptcy?
- Will bankruptcy stop a wage attachment?
- Will bankruptcy stop a foreclosure?
- Will bankruptcy stop an eviction, "unlawful detainer", action?
- Will bankruptcy stop a judgment?
- Will a bankruptcy remove a lien?
- I am divorced, will bankruptcy wipe-out my obligation to pay community debts?
- I am a co-signer for a debt, how does bankruptcy affect my obligation?
- Who notifies the creditors and bill collectors?
- Are there any debts that I can't wipe out in bankruptcy?
- Do I have to fill out forms?
- Do I have to go to court?
- What happens after I file my bankruptcy?
- Who deals with the creditors and bill collectors during the bankruptcy?
- What if I forget to list a creditor on my bankruptcy papers?
- What happens to my credit rating after bankruptcy?
- After bankruptcy, can I get credit?
- Is there any thing I should not do if I am contemplating bankruptcy?
- If I need to file bankruptcy again, how long do I have to wait?
- Who can help me with my bankruptcy?
- Is there any alternatives to bankruptcy?
We are here to help and will answer all the questions you may have. Contact Us toll-free at 1-800-SAVEDME.