Chapter 7 bankruptcies are often referred to as liquidations or straight bankruptcies. Most people file a Chapter 7 to receive a discharge. A discharge is the order a judge will sign at the end of your case that relieves you of your obligation to repay debts. While most debts are discharged in a Chapter 7 case, it is important to note that there are certain debts which are not. Some common forms of non-dischargeable debts include certain types of tax claims, spousal support, alimony, student loans, damages for willful and malicious injuries to person or property, criminal fines or restitution, debts for personal injury caused by driving vehicle while intoxicated and some homeowner association dues.
When you file a Chapter 7 bankruptcy you may keep all your property that is covered by exemptions. Exemptions are laws that set forth what type of property you get to keep. Exemptions vary by state but usually include a certain amount of the following types of property: furniture, household goods, clothes, jewelry, motor vehicle, house or homestead, pension plans, retirement accounts, life insurance and government benefits. If you have property that is not exempt it can be taken and sold to repay your creditors. This is why a Chapter 7 is referred to as a liquidation. While most clients get to keep all of their property, it is important you disclose all your property. We will carefully review your property together to determine if your property is exempt.
Clients who choose to do so often keep property such as a house or car that is collateral for a loan. One way of doing this is by signing a reaffirmation agreement that will cause the debt to survive the bankruptcy case. Alternatively, many clients choose to not to reaffirm the debt and surrender the property. Your decision and ability to keep collateral in a Chapter 7 is effected by how much equity you have in the property and the status of your loan. If you have collateral for any loans it is important to discuss these with our office. We will explain all of your options.
We offer a free consultation which will normally start the process of filing for bankruptcy. At the consultation we will examine your situation and go over such things as your property, income, expenses, debts and financial transactions. Your bankruptcy options and the associated costs will be explained to you. You will also have time to ask questions, because we believe every client should know what to expect when filing bankruptcy.
Once you hire the Law Office of Michael J. McVay, we will go through the documents which you brought with you and determine what additional documents are needed to file for bankruptcy. Once the appropriate documents are received, we will create your bankruptcy paperwork for signing and filing. Before filing your case you will need to complete a credit counseling course. You will also need to complete a second course after you file. These classes are commonly done on-line.
Once your case is filed, a notice will be sent to you and your creditors. This notice will contain your hearing date and time. The hearing is called a 341 meeting. At the 341 meeting, you will be asked questions by a trustee who represents your creditors. The trustee or other parties commonly have 60 days after the 341 meeting to file any objections to your case. If no objections are filed, you can expect to receive your discharge after the deadline expires.
To determine if you qualify for a Chapter 7 case we will examine your income and expenses. If you make above the median family income prescribed by Census Bureau you will need to pass a Means Test. The Means Test is an income and expense calculation based upon your expenses and certain IRS standards. If you do not pass the means test you may consider attempting to show the court exceptional circumstances or file Chapter 13.
DISCLAIMER: All material included in this website is for informational purposes only and may not reflect the most current legal developments or laws applicable to your case. Nothing provided in this website should be considered to be legal advice or a legal opinion. This web site or use of email is not intended to create an attorney-client relationship. The receipt of material from the web site or from Email transmission does not constitute an attorney-client relationship and under no circumstances should you construe any interaction with this website as creating an attorney-client relationship. *The choice of a lawyer is an important decision and should not be based solely on advertisements. *We are a Debt Relief Agency. We help people file for bankruptcy relief under the Bankruptcy Code.