Chapter 7 Bankruptcy
If you're considering filing bankruptcy under Chapter 7 of the U.S. Bankruptcy Code, you're probably interested in knowing what to expect during the course of a typical Chapter 7 case.
Get a nice introduction to Chapter 7 bankruptcy with the following information then speak with a local bankruptcy lawyer about what Chapter 7 bankruptcy may do for you.
We'll quickly connect you with a local sponsoring bankruptcy lawyer--just fill out the below form or call us at 866-288-7281 to get started today. It's free to connect. Act now.
Can I File Chapter 7 Bankruptcy?
Since the adoption of the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) in 2005, bankruptcy petitioners interested in filing under Chapter 7 have been required to pass a means test to qualify for the protections Chapter 7 offers.
Working with a Chapter 7 bankruptcy lawyer during this stage of the bankruptcy process is important for many filers because the Chapter 7 means test is somewhat complex. It requires you to compare the income of your household with the median income of a family the same size as yours in your state.
Depending on where you fall on the income spectrum, you may also have to calculate your disposable income – that is, how much money you have left over each month after you cover certain government-allocated expenses.
Enlisting the help of a bankruptcy attorney may be the most efficient and stress-free way of figuring out whether or not you can file under Chapter 7.
Can Chapter 7 Bankruptcy Protect Me?
Chapter 7 bankruptcy offers a different kind of financial protection than Chapter 13 bankruptcy, though both chapters can help with certain financial woes.
In general, here's what Chapter 7 bankruptcy may be able to do:
- Protect you from collection action: As soon as you file your Chapter 7 case, an automatic stay takes effect. This stay halts all collection action against you (including wage garnishment, repossession, foreclosure, lawsuits, etc.) as long as your bankruptcy case is pending.
- Discharge unsecured debts: Chapter 7 offers financial relief to filers by discharging certain unsecured debts (that is, debts not attached to any property like credit card, medical and utility bills). Certain debts, though, cannot be forgiven by the bankruptcy court – most child support, alimony, criminal penalties and tax debts, for example, will likely still be your responsibility.
- Prepare you for your post-bankruptcy life: Because BAPCPA mandates that all bankruptcy petitioners are required to complete a debtor education course before receiving a discharge, you'll get instruction on how to manage money, budget, and otherwise take advantage of the fresh start bankruptcy can offer.
How Long Will My Chapter 7 Case Take?
Unlike Chapter 13 bankruptcy cases, which generally last three to five years, Chapter 7 cases move relatively quickly.
Most Chapter 7 filers receive a discharge from the court within six months of filing their initial petitions. This means that you'll have to stay on top of all the requirements of your bankruptcy case, including:
- Completing your credit counseling briefing
- Filing your petition and schedules
- Collecting appropriate details about your personal finances for your bankruptcy lawyer to peruse
- Appearing at the Meeting of the Creditors
- Completing your debtor education course
To get a more detailed idea of what your timeline will look like if you choose to file for Chapter 7 bankruptcy, be sure to ask a bankruptcy attorney.
When Chapter 7 Bankruptcy Might Not Be Best for You
Filing Chapter 7 bankruptcy can help some people struggling with debt, but it's not in the best interest of everyone who's financially strapped.
If you find yourself in any of the following situations, Chapter 7 is likely not your best bet for getting out of debt:
- You have luxury items you don't want to give up. These may be sold by your bankruptcy trustee to raise money to pay back creditors.
- You're only interested in discharging some of your debts. You can't choose to repay certain creditors, even if they're friends – Chapter 7 bankruptcy applies to the entirety of your finances.
- You're not willing to play by the rules. Bankruptcy fraud is a federal crime that comes with penalties up to $250,000 dollars and five years in jail.
- You're expecting a windfall. Receiving significant money could make you ineligible for Chapter 7 protection.
- You own property jointly with family or friends. Your bankruptcy filing may affect their ownership as well. Consult a bankruptcy lawyer for details.
- Your income is well above your state's median. If you're in this position, your finances may be better suited for Chapter 13 bankruptcy or a bankruptcy alternative.
The Chapter 7 Bankruptcy Lawyer
Once you've got an idea of what you can expect from your Chapter 7 bankruptcy case, you may want to consult with a Chapter 7 bankruptcy lawyer to learn more.
When you're ready to take that step, Bankruptcy Central is ready to help you.
All you have to do is fill out our free online case evaluation form or call us at 866-288-7281 and we'll connect you--for free--with a sponsoring bankruptcy lawyer practicing in your area.
It's time to take control of your finances and Bankruptcy Central is ready to help.