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.
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Posted by: Erik Clark
Are there limits to how much or how little debt a debtor can owe in bankruptcy? Sometimes.
Last updated March 30, 2018. If you’re thinking of filing for bankruptcy, you may be wondering: “Is this even possible? Do I have too much debt?” Remember, for the general consumer case, there are two choices for bankruptcy: a Chapter 7 “straight” bankruptcy or a Chapter 13 “reorganization” payment plan. For Chapter 7, there is no limit to the…
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Posted by: Rob Cohen
Income Taxes Cannot be Included in Bankruptcy, Right?
Including Income Taxes in Bankruptcy Wrong, income taxes must be included in bankruptcy regardless of whether they’re capable of being eliminated. Because all debts and assets must be disclosed when you file for bankruptcy, back taxes are a debt owing and are automatically included upon the filing of the bankruptcy petition. They are “included” when…
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Posted by: Rob Cohen
What Documents Do I Need to Bring When I First Meet with My Bankruptcy Attorney?
Last updated Feb. 28, 2018. Filing for bankruptcy isn’t always easy. One of the biggest burdens under the “new” bankruptcy law that was forced upon debtors and their attorneys in 2005 was the requirement to produce volumes and volumes of documents. In addition to the formal schedules and statement of affairs, you’ll need to get together…
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Posted by: Erik Clark
Will Bankruptcy Cost You Your House?
Your house is your biggest asset, will you lose it in bankruptcy? This is a question many homeowners are anxious to find out. After all, for many families, their home is their biggest investment. In bankruptcy, property is divided into two piles: exempt an non-exempt. You keep exempt property and non-exempt property is subject to sale by…
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Posted by: Rob Cohen
I can’t afford a bankruptcy attorney, right?
You Can Afford a Bankruptcy Lawyer You can afford a bankruptcy lawyer. Myths to the contrary are WRONG! And, as has been posted previously, to fail to hire an attorney to help prepare and file your bankruptcy petition, may expose you to all sorts of negative consequences. The worst of which could be dismissal of…
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Posted by: Walter Metzen
Bankruptcy and Foreclosure: The Consumer’s Overview
OK, here’s the deal with bankruptcy and foreclosure. Despite what you may have heard, filing for bankruptcy does not necessarily permanently stop a lender from foreclosing on your home. Filing for bankruptcy will always temporarily stop the bank foreclosing on your home. This is true regardless of which chapter you file under. In some cases,…
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