Chapter 7 bankruptcy allows you the option to liquidate your assets in order to pay off your debts. This can mean that your home, vehicle, and other assets that you own can be removed from your name, and their value can be used to pay off creditors. There are eligibility requirements such as the applicant passing the means test and that they haven’t filed for Chapter 7 in the past eight years. The applicant must undergo credit counseling prior to filing for bankruptcy and need to complete this within six months of filing to be eligible. The applicant must file several forms, including thorough information on all of the creditors owed, their income and expected changes to that income over the next year, details of their assets and expenses, and more.
How is Debt Handled with Chapter 7?
There is an order in which debts are to be paid through the filing of Chapter 7 Bankruptcy. Unsecured priority debts are paid first, which can include things like past-due income tax, child support or alimony, and personal injury claims. Secured debts are paid next and can include a home mortgage or a vehicle loan. Last in line are the non-priority unsecured debts such as medical bills, credit cards, and more. If there are not sufficient funds left after all other debts are covered, some or all of these may be discharged/forgiven.
What Items are Not Paid/Forgiven by Filing Chapter 7?
Items such as student loan debt are not forgiven when filing for Chapter 7 (as with Chapter 13). Other items such as unpaid fines and restitution, child support, alimony, and more are also not forgiven when filing. Debts due to fraud or due to wrongful and harmful acts are also not forgiven and must be paid. All of these items will need to be fulfilled outside of filing for Chapter 7.
Why Hire An Attorney?
Bankruptcy laws are strict and have multiple chances for error in timeliness as well as required information supplied to the courts. The process can seem overwhelming even for those that are well-versed in the process, and this can cause added costs or fines to the consumer when submitted incorrectly. By working with an experienced attorney, you can be confident that the process is effective and correct, void of unnecessary mistakes and added costs, and that you are able to move forward with your life.
Contact an experienced bankruptcy attorney at our office today at (304) 592-4609. Let us help to evaluate whether Chapter 7 is the best fit for you, understand the process, get your specific questions answered, and begin the process. We look forward to your call.