Bankruptcy - Chapter 7

If you are unable to make any meaningful payments back to your creditors, you may qualify for straight bankruptcy, known as Chapter 7. Chapter 7 allows you to eliminate debts, bills and other financial obligations; and to keep all your property that is exempt under state or federal law. Chapter 7 gives a person the chance to get a fresh start and by filing Chapter 7, creditors are prohibited from contacting you during your case and then also after the case, as your debts will have been eliminated. Chapter 7 may allow you to start rebuilding your credit fast.

Specifically Chapter 7, entitled Liquidation, contemplates an orderly, court-supervised procedure by which a trustee takes over the assets of the debtor's estate, reduces them to cash, and makes distributions to creditors, subject to the debtor's right to retain certain exempt property and the rights of secured creditors. Because there is usually little or no nonexempt property in most chapter 7 cases, there most likely will not be an actual liquidation of the debtor's assets. These cases are called "no-asset cases."

A creditor holding an unsecured claim will get a distribution from the bankruptcy estate only if the case is an asset case and the creditor files a proof of claim with the bankruptcy court. In most chapter 7 cases, if the debtor is an individual, he or she receives a discharge that releases him or her from personal liability for certain dischargeable debts. The debtor normally receives a discharge just a few months after the petition is filed. Amendments to the Bankruptcy Code enacted in to the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 require the application of a "means test" to determine whether individual consumer debtors qualify for relief under chapter 7. If such a debtor's income is in excess of certain thresholds, the debtor may not be eligible for chapter 7 relief.

Call us now at 972-527-4500 to schedule a free appointment with me personally to discuss your options! We are a Designated Debt Relief Agency under Federal Law and we provide legal assistance to consumers and others seeking relief under the United States Bankruptcy Code.