Filing Chapter 7 Bankruptcy
Chapter 7 Bankruptcy is designed for debtors having financial difficulty that do not have the ability to pay their existing debts. It is best suited to those cases in which the majority of debt is unsecured. Debtors can protect certain assets up to a predetermined amount. This is probably the most common form of personal bankruptcy.
To qualify for filing Chapter 7 bankruptcy, you must satisfy the standards referred to as the “Means Test”. A Means Test is essentially a quick check of debt to income.
A Chapter 7 bankruptcy is commonly referred to as a “Straight Bankruptcy”. The beauty of a Chapter 7 bankruptcy is that it will nullify your unsecured debts such as medical bills, credit cards, and personal loans. Part of the process to file Chapter 7 bankruptcy is to list all of your creditors and information such as account balances. The clerk of the bankruptcy court will notify each creditor of your filing.
When you file Chapter 7 bankruptcy you will be instantly protected against collections efforts because of the Automatic Stay. As soon as you file for bankruptcy protection you can stop making any payments to creditors. This is when your life gets better!
A Chapter 7 bankruptcy will not eliminate secured debts such as auto or home mortgages. To keep your property you must continue to make regular monthly payments. For some debts, the creditor may ask you to sign a “reaffirmation agreement” which legally binds the debtor to repay the debt. You are not required to sign this agreement although you may want to do so in certain situations.
One limitation of a Chapter 7 bankruptcy is that it will not allow for the discharge of student loans, child or spousal support, or most tax issues.
If you’re tired of fighting a battle you can’t win you need to call us. We can prepare and file your Chapter 7 bankruptcy very quickly. If you’re ready to dump your debt, keep your money and eliminate the stress of debt collections, call us for a consultation with a Chapter 7 bankruptcy lawyer.
