Chapter 7 Bankruptcy

Chapter 7 Bankruptcy is also referred to as a “liquidation” bankruptcy. Typically, a Chapter 7 is 4-5 months long.

In order to file a Chapter 7 Bankruptcy, you must meet the specific household income and budget requirements. Your household income and budget must pass the “Means Test” (which is the standard set by Bankruptcy Law).

In a Chapter 7, there are many State and Federal exemptions that allow you to keep and protect a certain amount of your property. However, if there are not enough exemptions, then it is possible for the Trustee to “liquidate” any of your non-exempt assets in order to pay your creditors, and / or you may have to surrender some of your property.

A Chapter 7 Bankruptcy allows debtors to “discharge” most of their unsecured debts (such as credit card balances, medical bills, personal or payday loans, repossession deficiency balances, etc.).

Secured debts (such as a mortgage and car) and priority debts (such as child support, alimony, tax debt, student loans, etc.) are generally non-dischargeable in any Bankruptcy. Thus, you will still owe these balances at the end of your Chapter 7 Bankruptcy.

America Law Group can help you determine whether you meet the eligibility requirements in order to file a Chapter 7 Bankruptcy and whether it is in your best interests to file a Chapter 7 Bankruptcy depending on your individual circumstances.

For more information from the United States Bankruptcy Court website, go to the following link: https://www.uscourts.gov/services-forms/bankruptcy/bankruptcy-basics/chapter-7-bankruptcy-basics