What is Chapter 7 Bankruptcy And Is It Right For Me?
Chapter 7 bankruptcy erases most debts giving the filer a fresh start with his or her credit. It generally lasts about four to five months from the time the case is filed until it is completed. People who have a large amount of unsecured debt, such as credit cards, personal loans, utilities, payday loans, cash advances, monies owing after vehicle repossessions, garnishments and medical bills are typically good candidates for chapter 7 bankruptcy. In the majority of cases, a person can keep their home, car, and other valuables, when he or she files.
Will I Lose My Property If I File For Chapter 7?
Most people who file for chapter 7 bankruptcy do not lose any of their property. Chapter 7 bankruptcy is sometimes referred to as a liquidation bankruptcy because some assets can be sold by the bankruptcy Trustee to pay back the person’s creditors. This rarely occurs, however, because our expert attorneys carefully comb through every detail of your case and check for anything that could be an issue for the trustee. Furthermore, both state and federal bankruptcy laws provide a list of particular items that an individual, couple, or family can keep. These items are called exemptions and they provide protection for a person’s assets. Those assets are considered exempt from the bankruptcy and cannot be touched by creditors or the trustee.
Will Chapter 7 Bankruptcy Get Rid Of All of My Debts And Judgments?
While chapter 7 bankruptcy erases most debts and judgments, some debts cannot be erased in chapter 7. In those cases, chapter 13 is a usually a good alternative. However, there are some debts that usually cannot be erased in any bankruptcy type. Some of those debts include student loans; recently owed income taxes; child support or alimony; and fines or fees related to criminal charges and traffic tickets.
Chapter 7 Is A Good Option When:
- A person cannot pay his or her monthly credit card bills or can only make the minimum payment.
- A person's wages have been garnished or are about to be garnished.
- A person has been sued or has recently had a judgment entered against them.
- A person has mounting medical bills that cannot be paid off.
- A person has payday loans.
- A person's car has been repossessed or is in danger or repossession
- A person's home is going into foreclosure.
- A person cannot keep up with his or her monthly bills and are struggling to keep your head above water.
- A person has recently lost their job, had a decrease in income and/or increase in household expenses or has had a change in his or her family status such as a death, marriage or divorce, or a child and can no longer afford to pay bills.