There are only a few options for individuals facing an overwhelming amount of debt. One of these options is Chapter 7 bankruptcy. Filing for Chapter 7 bankruptcy can give you the fresh start you need to find financial freedom.
To learn more about filing for Chapter 7 Bankruptcy, continue reading below.
What is Chapter 7 Bankruptcy?
Liquidation bankruptcy, more commonly known as Chapter 7 bankruptcy, is a tool used to discharge unsecured debts, such as medical bills, personal loans, and credit card debt. However, Chapter 7 bankruptcy typically does not forgive all forms of debts, such as alimony, child support, student loans, court judgments, and back taxes.
Qualifying for Chapter 7 Bankruptcy
Before you can file for Chapter 7 bankruptcy, you must pass a means test to determine if you are eligible. This test looks at your household income, expenses over the last six months, and family size to determine eligibility. If you do not have enough disposable income to repay debts, you will likely qualify for Chapter 7 bankruptcy.
How Does Chapter 7 Bankruptcy Work?
Here is an overview of the filing process:
Pre-File Counseling Course — Before you can file for Chapter 7 bankruptcy, you need to complete counseling within 180 days from a qualified agency.
Hire an Attorney — It is highly suggested that you hire a skilled bankruptcy lawyer to help you because of the many intricacies involved.
File Paperwork — Gather all necessary documentation so you and your attorney can file your petition and other paperwork. You will pay filing fees, as well. Your automatic stay goes into effect here to protect against creditors' harassment and wage garnishments.
Trustee Management — When your petition is filed, your bankruptcy trustee, who is appointed by the court, will take over the process.
Meeting of Creditors — You will attend a meeting with your trustee, lawyer, and creditors.
Determine Eligibility — Your trustee will review paperwork to determine if you are eligible for Chapter 7 bankruptcy. If you are not, you will need to explore other options, such as Chapter 13 bankruptcy.
Non-exempt Property — Your trustee will sell non-exempt assets, such as jewelry, your house, or car, to repay creditors with the proceeds.
Secured Debts — In your paperwork, you will state how you plan to handle secured debts. For your case to close, you will need to take action on these matters.
Debtor Education Course — Complete a financial education course so your case can discharge.
Discharge — Congratulations! When your case is discharged, you no longer have a legal obligation to pay debts.
Contact Charles W. Daff Bankruptcy Attorney
While Chapter 7 bankruptcy is the simplest form of bankruptcy, it is far from simple. Many people facing bankruptcy turn to a knowledgeable attorney to help navigate this overwhelming process. If you are in the Santa Ana, California area and are drowning in a magnitude of debt, contact The Law Offices of Charles W. Daff. Our team of experts has over 40 years of experience in bankruptcy law and can guide you to financial relief. Contact us to schedule your initial consultation, free of charge, today!