Compassionate Chapter 7 Bankruptcy Lawyer Helping Texarkana Families Recover from Debt
The Chapter 7 Basics
When you file for Chapter 7 bankruptcy, the bankruptcy trustee will cancel most, if not all, of your debts. The trustee may also liquidate some of your property/assets in order to repay your creditors. This can include your home or car. Chapter 7 bankruptcy gets its name from the law by which it is governed, found in chapter 7 of the federal Bankruptcy Code. Chapter 7 filings are completed quickly in comparison to other liquid consolidations; the entire discharge process lasts just four to six months. This allows you to start rebuilding your credit more quickly, but the bankruptcy will appear on your credit report for ten years.
Chapter 7 Eligibility
If you wish to file for Chapter 7 protection, your income cannot be over a certain amount. If it is, you will be required to pass a “means test.” Additionally, the bankruptcy court may dismiss your case if you have filed a previous bankruptcy within a certain period of time, or if the court finds that you are not being forthright with your creditors. By filing for Chapter 7 bankruptcy, you are legally prevented from selling or giving away any of the property you own at the time of your filing. You are also prohibited from paying off pre-filing debts without the consent of the court.
How Can We Prepare for Court?
When you file for Chapter 7 bankruptcy, the court will ask you to submit some forms with the following information: an itemized list of your property/assets, your current income and monthly expenditures, any and all debts, any and all “exempt” property (i.e. home equity, clothing, vehicle(s) and/or work-related property), as well as any property you owned and/or sold in the last two years.
Property During Chapter 7 Bankruptcy Proceedings
If the bankruptcy trustee finds that you possess some nonexempt property, you may be required to either surrender that property or provide the trustee with its equivalent monetary value. If the property is worth very little, or if it would prove difficult for the trustee to sell it, the trustee may decide that you can keep it, despite its nonexempt status.
The End of Chapter 7 Bankruptcy Proceedings
Following the completion of a Chapter 7 bankruptcy, all of your debts will be discharged by the court, with the exception of those that do not apply to the proceedings (i.e. child support, tax obligations, and student loans) and any and all debts that your creditors objected to seeing forgiven.