Chapter 7 Bankruptcy
Often referred to as “straight bankruptcy,” Chapter 7 bankruptcy is a process, organized under federal law, that provides consumers with the opportunity to discharge their unsecured debts. Common debts eliminated by filing for Chapter 7 bankruptcy include: credit cards, medical bills, personal loans and mortgage debts. When a Chapter 7 case is filed, all of the debtor’s property is temporarily under supervision of the bankruptcy court and a case trustee. Property that is considered “exempt” is retained by the debtor; conversely, property that is “nonexempt” is subject to sale by the bankruptcy trustee with the proceeds distributed to creditors. It is important to note that as a practical matter, most people are able to shed their unsecured debts through Chapter 7 with out losing any property. A typical Chapter 7 bankruptcy case usually lasts between 4 to 5 months. At the end of the process, the bankruptcy court issues a discharge that operates as a permanent injunction preventing creditors from seeking to collect on debts that were included in the bankruptcy.
Exemptions: What Can I Keep if I File Bankruptcy?
Many people mistakenly believe that they will lose everything when they file for Chapter 7 bankruptcy. In fact, in the thousands of bankruptcy cases I have filed for clients over the years, this is one of the biggest questions I get – “will I lose all my property in a bankruptcy?” This is not the…Read more
Posted by: Erik Clark
All’s Not Forgiven When Debts Are “Forgiven”
Debts discharged in bankruptcy are not taxable events.Read more
What is the Difference Between Surrendering a Home and Foreclosure?
What is the difference between surrendering a home in bankruptcy and losing a home to foreclosure? Many consumers are confused by the interplay between the two. When you file bankruptcy and surrender a home, you give the property back to the lender. When a lender forecloses on your home due to non-payment, they take the home…Read more
What is a Homestead Exemption? Can My Creditors Take My Home?
Homestead exemption laws prevent the sale of a borrower’s home by their creditors in satisfaction of a debt. In many states, whether your home may be subject to forced sale is a function of how much home equity you have. A Homestead is Your Primary Residence A homestead is defined as your primary residence; investment…Read more
Posted by: Erik Clark
I’m Not Current on My Car Payments, Do I Have Options in Chapter 13?
Can Bankruptcy Help When You’re Behind on Your Car Payments? When money is tight, and you are considering bankruptcy, you have often been behind on payments for months. You have run up credit card debt, and missed payments on your car and mortgage. And now, perhaps your lender is threatening to repossess your car. What…Read more
Posted by: Rob Cohen
What Property Can I keep In A Bankruptcy?
Filing bankruptcy doesn’t have to mean losing all of your property People considering bankruptcy often have the misperception that they will lose all of their property if they decide to file. Fact is, only non-exempt property will be eligible for sale in a chapter 7 bankruptcy. What does this mean? As a matter of public…Read more