Chapter 7 Bankruptcy – Basic Information
What is a Chapter 7 Bankruptcy?
A Chapter 7 bankruptcy is commonly known as a straight bankruptcy and gives filers an opportunity to eliminate most unsecured debt. Once your debt is discharged in a Chapter 7 bankruptcy, you are no longer obligated to pay it back. Not all debtors are eligible to file for a Chapter 7 bankruptcy.
Who can file for a Chapter 7 Bankruptcy?
In order to file for a Chapter 7, you have to satisfy certain eligibility requirements, one of which is the Means Test. In the event that you do not qualify to file under a Chapter 7, you may be eligible to file a Chapter 13 bankruptcy. Unless you are a disabled veteran filing who is filing bankruptcy to eliminate debt incurred while on active duty, or a business that accumulated debt from running daily operations, all debtors have to appease the Chapter 7 requirements.
Do I have to surrender my assets?
A Chapter 7 is also referred to as liquidation – certain assets can be seized by the Trustee and sold off to pay creditors. However, bankruptcy law does protect some kinds of property. These are referred to as exemptions. Some of the property that may fall into the exemptions include:
- Some real estate
- Motor vehicles
- Certain personal property
Exemptions vary from state to state. It is essential to check your state’s laws to determine what property is exempt.
What is the difference between Non-exempt and Exempt Property in a Chapter 7 bankruptcy?
Although you filed for a Chapter 7 bankruptcy, there may be some property that simply cannot be protected from creditors. Non-exempt property may include:
- Musical instruments, except if you are a professional musician.
- Family heirlooms.
- Cash, stocks, bonds and bank accounts.
- A second car or a vacation home.
How Can A Chapter 7 help me?
- A Chapter 7 eliminates most unsecured debt, and can give you a fresh financial start.
- If your wages are being garnished, filing a Chapter 7 bankruptcy may prevent any funds from being deducted out of your paycheck.
- Filing a Chapter 7 may also prevent evictions.
- If any of your utility services have been discontinued, a Chapter 7 bankruptcy may help you restore your services.
- A Chapter 7 bankruptcy is a fairly quick and easy process, and may give you that clean financial slate that you deserve.
How Can A Bankruptcy Attorney Help Me?
Obtaining the help of an experienced bankruptcy attorney is crucial to your success in a Chapter 7 case. At ZocLaw.com, our experienced bankruptcy attorneys will be by your side every step of the way. Schedule your free initial consultation to determine whether a Chapter 7 is the best choice for you.