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. One of the important functions of a bankruptcy attorney is to help you classify whether your property is exempt. Exemption laws vary depending on which jurisdiction you live in. 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. Below, you’ll find hundreds of articles that have been written on the subject of chapter 7 bankruptcy. If, after browsing through these posts, you don’t find the answers that you need, we invite you to post a question to our QA forum. Thank you for visiting the National Bankruptcy Forum.
Each bankruptcy case is different: Don’t throw the baby out with the bathwater You’ll hear a lot of people conclusively say: “bankruptcy is bad.” But why? Why is the general consensus that filing for bankruptcy is a bad thing? While it is true that filing for bankruptcy is evidence of trouble with personal finances, that’s […]
The Bankruptcy Consultation The initial bankruptcy consultation is a first meeting, usually lasting between 30-60 minutes, in which your bankruptcy attorney gets a feel for the financial issues you are confronting and how best to address them. A good bankruptcy attorney will not try to “steer” you in the direction of bankruptcy and the meeting may very well […]
Selling Property to Avoid Bankruptcy is Often a Bad Idea Don’t cash in your 401(k) or sell your property to avoid bankruptcy. In the last several months, I have had a large number of people in their 50s and 60s contact me about filing for bankruptcy. In a lot of ways, this recession has hit […]
California foreclosure laws are among the nation’s most complex but are also fairly consumer friendly. In this post, we will attempt to provide good answers to the most common questions California residents have about the foreclosure process, both before and after a sale. A Brief Introduction to Mortgages In order to fully grasp the information […]
How Do Short Sales and Foreclosure Differ? With the housing market the way it is, many people want to know: what is the difference between a short sale and a foreclosure sale? And what difference does it make in bankruptcy? In a short sale, you have defaulted on your loan and cannot make the payments, but […]
Texas law allows lenders to pursue deficiency judgments after foreclosure A deficiency judgment arises when the proceeds from a foreclosure sale fail to satisfy the outstanding mortgage balance, and a lender wins a lawsuit seeking payment of the difference. See also: will I owe money after foreclosure? In Texas, lenders are permitted to sue for […]
I Need to File Bankruptcy, But I’m Worried About My Job…Can I Get Fired? If you have a job, need to file bankruptcy, and are worried about getting fired because of it, you probably shouldn’t be. The bankruptcy code prevents employers from firing you just because you have filed for bankruptcy. However, if you are […]
Exemption laws protect your property from creditors Inside of bankruptcy, exemption laws shield certain items of property from the bankruptcy trustee. Outside of bankruptcy, exemption laws protect your property from judgment creditors. The first rule to remember is that not all of your stuff is exempt. Each state and even the federal government have laws […]
A judgment is a legal determination that you owe a debt A judgment is really just a piece of paper signed by a judge that says you owe a debt. For example, in the event you can’t pay a credit card on time, the bank has no immediate recourse. They can call and write, but […]
Why Not Student Loans? In the famous decision, Local Loan Co. vs. Hunt, the Supreme Court summed up the relatively simple policy behind our bankruptcy laws: the “honest but unfortunate” debtor is given the opportunity to start over, “unhampered by the pressure and discouragement of preexisting debt.” The idea of periodic debt forgiveness is ancient, appearing numerous […]