Chapter 7 Bankruptcy

With a Chapter 7 bankruptcy you can wipe out common, unsecured debt if you meet the standards established in 2005 and commonly referred to as a “Means Test”. A Chapter 7 bankruptcy is commonly referred to as a “Straight Bankruptcy”. A Chapter 7 bankruptcy will eliminate unsecured debts including credit cards, personal loans, medical bills and dental bills. Early in the filing process you will be asked to provide a list of all creditors, account balances and related information. When you file bankruptcy you will automatically be protected against collections efforts and lawsuits. At this point you should stop making any payments on our debts.

A Chapter 7 bankruptcy will not eliminate secured debts including car loans and mortgages. If you want to keep your this property you must continue to make those payments. You may be asked to sign a “reaffirmation of debt” which is a promise to pay however this is completely optional. A Chapter 7 will also not eliminate debts such as student loans, past due taxes, child support or alimony. (Chapter 13 bankruptcy handles these differently.)

When filing for bankruptcy do not ever do any of the following actions:

  • Do not accrue any further debt. This includes charges on credit cards, unsecured loans or similar transactions. Knowingly entering into borrowing arrangements when you are preparing to file bankruptcy can cause serious problems.
  • Do not make transfer ownership of any property (cars, land, homes, etc.). Willfully transferring ownership of real property when you are preparing to file for bankruptcy is essentially hiding assets and will cause you a lot of trouble.

The bankruptcy process involves several steps which will include at least one in-person appearance in Federal bankruptcy court. This appearance is not in a traditional courtroom setting and is more of a formal meeting than a courtroom situation. The Court will appoint a Trustee who is a Federal attorney assigned to handle your case. You will be asked under oath to verify the information that you have provided regarding income, assets and debts. The laws regarding perjury will apply to you so it is important to provide clear and accurate answers to any questions. Our firm will provide you with legal representation at this meeting and we will answer any questions that you may have regarding this meeting.

Prior to your meeting with the Trustee we will work with you to complete the necessary forms and paperwork, answer your questions and guide you through the bankruptcy process. Although the process has many steps we can make it relatively easy to complete. Call us today for more information on filing Chapter 7 bankruptcy.