Consumer – Chapter 7

The Chapter 7 process is the most straight-forward of all the chapters of bankruptcy. Should you be eligible to file and choose to do so, you would first need to produce information to me about:

  • Your assets (such as homes, cars, stocks, jewelry, and such — anything you own that has value)
  • Your debts (money that you owe to creditors, including car loans, credit cards, personal loans, taxes)
  • Your income (what you make)
  • Your expenses (your monthly budget)

With this information, I assemble your bankruptcy petition. After filing the petition, the bankruptcy process for a Chapter 7 case usually takes four to six months to complete, but you usually only need to attend Court one time, for meeting with the Trustee assigned to your case, which usually only takes a few minutes. Most of the four to six months involves simply waiting for the Court to issue paperwork.

Most people considering bankruptcy have many questions regarding what debts can be discharged and whether they can fileĀ  Chapter 7. I really can not answer all those questions accurately without learning the details of your situation, but a few of the big points to remember are:

  • Since the 2005 changes to the Bankruptcy Code, how much you earn is a critical question, but even if you earn a reasonably substantial salary you may still be eligible to file Chapter 7, depending especially upon certain of your expenses: for example, monthly obligations such as mortgages and child support can reduce your income into the acceptable range.
  • Home ownership does not disqualify you from Chapter 7. If you have a lot of equity in your home (that is, the value of the house is much higher than the mortgages) it can cause problems, but in today’s market, that is rare: and in fact, the situation is often reversed.
  • Family support obligations such as child support are never dischargeable.
  • Student Loans generally are not dischargeable. There are some rare exceptions, but they are very rare.
  • Income taxes can sometimes be discharged if certain criteria is met.