Chapter 7 Bankruptcy in brief:


Chapter 7 of Title 11 (the Bankruptcy Code) can permanently protect you from losses by discharging (cancelling) most types of debt and stopping collections cold.

Chapter 7 bankruptcy can end creditor calls, lawsuits and garnishments.

Chapter 7 bankruptcy means new-found freedom and a fresh start.

Who can file Chapter 7 Bankruptcy?

Chapter 7 bankruptcy is available to low-income AND (in many cases) to high-income persons (for example, if they have sufficiently high expenses or if their debts are primarily “non-consumer” in nature).  

You can file chapter 7 bankruptcy with OR without your spouse. If you successfully filed it in the past, then you can file again if 8 years have passed.

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what debts does chapter 7 cancel?

 Credit cards, medical bills, personal loans (including pay day loans), civil judgments and business loans are among the types of debts routinely discharged (forgiven) in chapter 7 bankruptcy. Secured debts (like mortgages and vehicle loans) are technically discharged, but the liens remain intact; you have to pay those debts if you wish to keep the collateral. But deficiencies (after auto repossession or foreclosure) are fully forgiven.  Certain (older) income taxes can be discharged. Student loans (both government and private) are generally not discharged. 

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How does chapter 7 bankruptcy work?

A chapter 7 bankruptcy case concludes in 3 months (from filing a petition to discharge).

Due to COVID-19, the mandatory trustee meeting (a brief interview to confirm the information in your filed papers) is virtually held (telephonically or via Zoom).  

All information can be provided electronically; from start to finish of the bankruptcy process, you needn’t leave home.

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Chapter 7 Bankruptcy Protects Property:

As opposed to losing property, chapter 7 serves to protect your property from creditors. By cancelling debts, creditors cannot seize your bank accounts, levy your wages or place liens on your property.

Due to certain limits, in some cases, the alternative chapter 13 bankruptcy (a 36- to 60-month payment plan) is proposed. Before you commit to anything, we will let you know if you qualify for chapter 7 bankruptcy and if it’s in your best interest to file.

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