Chapter 7 Bankruptcy
When you file for Chapter 7 bankruptcy, you are taking a positive step toward restoring your financial independence. At the Bankruptcy Law Center, we are committed to helping you through this often daunting process, empowering you to exercise your rights and become free of the debts that are weighing you down. We recognize that the decision to file may be a source of concern for you, so we demystify the law and help you find a viable solution to your financial challenges. Chapter 7, sometimes called “straight bankruptcy,” is the most common form of bankruptcy in the United States. For most people, Chapter 7 bankruptcy eliminates all debts and allows you to keep your possessions and property. Chapter 7 bankruptcy typically results in the “discharge” of your debts about 3 months after you file a petition.
As part of the process, we determine your eligibility to file (called the “means test”) and we show you how bankruptcy will change your life by discharging your debts. Your bankruptcy case will get rid of your personal liability on most all debts, including credit card debt, medical bills, utility bills, personal loans, lawsuits, mortgages and underwater liens on property. Of course there are some limited types of debts that are not eliminated in a Chapter 7 bankruptcy. These are called “exceptions” to your discharge and they are spelled out in the law. These limited exceptions include alimony and child support, some types of tax debts, debts incurred dishonestly or that resulted from criminal penalties and most government insured student loans. These situations are rare, but at the Bankruptcy Law Center we have helped people deal with all types of situations and we have found relief from debts under many difficult circumstances.
Chapter 7 bankruptcy also provides generous “exemptions” that allow most people to keep all of their property. These exemptions are very complex and specific so you need an expert to make sure you get the full and fair benefits in order that your property remains in your hands. Your goal is to keep all off your personal property, your vehicle, home furnishings, tools of your trade, reasonable amounts of cash and very significant amounts of equity in your home. The rules for exemptions also require, in many cases, some planning before you file a bankruptcy case, so consulting with the Bankruptcy Law Center will start the process that will answer all your questions about what happens to your property.
Chapter 7 bankruptcy may even give you an opportunity to eliminate some liens from your home under conditions where your property is underwater. This process is commonly called “lien stripping” and Bankruptcy Law Center attorneys are highly experienced at using the bankruptcy laws pro-actively improve your financial standing and to protect your property. Other than these situations, Chapter 7 bankruptcy will not generally eliminate liens on your property and these liens will pass through bankruptcy unaffected by the case. You won’t have personal liability for the debts underlying most all of these liens after bankruptcy, but the lien or mortgage holder will eventually be allowed to take back the liened property unless you pay the amounts legally due.