Chapter 7 bankruptcy offers a fresh start to people who find themselves debt. In the chapter 7 bankruptcy, people can petition the court seeking to reset their financial lives. The vast majority of chapter 7 cases discharge unsecured debts without any hearing before the judge. Once you get a discharge, you’re no longer legally obligated to pay most unsecured debts. It also means that creditors and debt collectors can’t contact you about those debts, report them as late to the credit bureaus or otherwise bother you about them.
Some of the most common types of debt discharged in a Chapter 7 bankruptcy case include:
- credit card debt
- medical bills
- past-due rent and utilities
- payday loans
- some tax debt
Chapter 7 Bankruptcy Basics
Courts have stated that the purpose of consumer bankruptcy is to offer the honest debtor a fresh start. Most people don’t realize that bankruptcy is mentioned in the body of the constitution—many of our founding fathers were in America because they where bankrupt! Chapter 7 bankruptcy is designed to protect people, wipe the slate clean and begin again on a more solid financial footing.
Because Bankruptcy offers such final and lasting solutions to debt, there are very complicated rules and procedures. Having the right attorney can make all the difference in the world for getting your case through the courts so you can move on with your life.
Why you need a Chapter 7 Bankruptcy Attorney
In order to file a bankruptcy case and successfully receive a discharge, you must complete approximated 50-75 pages of government drafted forms. The language is complicated making it difficult to know just what to do. You sign all of your bankruptcy paperwork under penalty of perjury, so making even seemingly small mistakes can create very big problems.
Using information you provide, our office will prepare the petitions and schedules that detail your income, debts and assets for the bankruptcy court. Our attorneys review the statements and schedules with you multiple times before they are filed with the court. We provide a sheet with common issues that we have seen in chapter 7 bankruptcy cases that will ensure you are aware of any issues that might arise in your case.
After we file your case, the court will appoint a bankruptcy trustee to oversee your case. The trustee’s primary job is to make sure that any available assets are distributed to your creditors, but many Chapter 7 filers can keep all of their property. You are required to have at least one meeting with the trustee where he or she will interview you under oath about your statements and schedules. We prepare you for the hearing and attend the hearing with you. We are by your side the entire time.
Whether you get to keep your property in the chapter 7 bankruptcy case depends on state law. One of the biggest mistakes people who don’t have an attorney make is attempting to transfer assets (including money and tax refund proceeds) prior to filing their bankruptcy. Congress realized t his would be a problem so they gave the trustee very broad powers to unwind those types of transfers. While the Supreme Court has said that bankruptcy planning is allowed to protect yourself, it must be done within the confines of the bankruptcy code. Having an experience attorney assist in planning your bankruptcy case may make the difference between having to turn over your property or being able to keep all your property. Our attorneys make sure that you can anticipate what is going to happen in your case.
The Chapter 7 Means Test
In 2005 Congress interjected a complicated formula into the bankruptcy code to determine who is allowed to file a Chapter 7 bankruptcy. Of course, the law is only intended to help those who truly can’t repay their debts. To file for Chapter 7 bankruptcy and receive a discharge, you must qualify under a financial analysis known as the means test.
The actual means test calculation can be complicated, and having a knowledgeable bankruptcy lawyer is the best source of specific information. It is best to contact us so we can discuss if you qualify for a chapter 7 bankruptcy under the means test.