Chapter 7 Bankruptcy is often called the "Fresh Start" bankruptcy. Individuals can file for bankruptcy in a federal court under Chapter 7 (also referred to as "straight bankruptcy" or "liquidation") and are generally discharged of many types of unsecured debts such as credit cards, personal loans, medical bills, and some judgments. Filing a Chapter 7 bankruptcy puts into effect something called an "automatic stay," which immediately stops your creditors from trying to collect. As a result, creditors cannot garnish your wages, empty your bank account, or go after your car, your house, and your personal belongings. In a Chapter 7 bankruptcy, the individual is allowed to keep certain exempt property. Each state has its own set of exemptions and a qualified bankruptcy attorney will be able to outline the type of property that is exempt from liquidation in a Chapter 7. In most cases, all property is exempt and there is nothing for the bankruptcy trustee to liquidate. If you have any questions you should contact one of our attorneys for a Free No Obligation Legal Evaluation.

Is a Chapter 7 Bankruptcy Right For You?

If you are drowning in debt, and you feel as though there is no end in sight, bankruptcy may be the best option for you. The following are a few questions for you to consider: Are you struggling at the end of the month to pay your living expenses? Has your credit card debt become virtually unmanageable? Are you falling behind in paying on your personal loans and/or payday advances? If you answered "yes" to one or more of these questions, then Chapter 7 bankruptcy may be your best option.

Bankruptcy no longer has the personal stigma attached to it that was previously thought. Many people mistakenly believe that filing bankruptcy will ruin of their life. However, as clients begin to become educated with some of the real life outcomes of filing bankruptcy, many are pleasantly surprised that it is quite the opposite! Credit is based on many different criteria, including debt-to-income ratio, so in many instances filing for bankruptcy will allow you to improve your credit rating sooner than later. By making on time payments on new debt incurred subsequent to your bankruptcy, you can regain your credit rating within a relatively short time from your discharge. In fact, in many cases filing bankruptcy may actually help your credit score because discharging your debts greatly improves your debt-to-income ratio. This can occur even though the filing will still be noted by the credit reporting agencies for 7 to 10 years. Also without those high minimum payments, you can actually start to save money each month and prepare for your future instead of living month-to-month, paycheck-to-paycheck. To find out if you qualify for a Chapter 7 bankruptcy you should contact one of our experienced Bankruptcy Attorneys for a Free No Obligation Legal Evaluation.

Chapter 7 Process

A Chapter 7 bankruptcy will usually take approximately 4-6 months to complete from the filing of the bankruptcy petition to the discharge of the debt, although this process may take longer for more complicated cases. Prior to filing a Chapter 7, the Debtor must complete a court approved credit counseling course. These courses may be found on the Department of Justice's website. This course can typically be taken online or over the telephone. After the Debtor has completed the credit counseling course, the Debtor's bankruptcy petition may be filed with the US Bankruptcy Court. The Debtor's bankruptcy petition must contain a list of all creditors and the amount owed, the nature of the claims, the source, amount and frequency of the debtor's income, a list of all the debtor's property, and a detailed list of the debtor's monthly living expenses. Once filed, the case is assigned to a bankruptcy trustee who is put in charge of determining whether the debtor has any assets that may be liquidated for the benefit of the debtor's creditors. To determine whether you have any assets that may be liquated you should seek the advice of an experienced attorney. After the case is filed, the Debtor is required to complete a second mandatory Debtor's Education Course. Approved courses may also be found on the Department of Justice's website. Approximately one month after filing, the Debtor is required to attend a 341(a) Meeting of Creditors, where the creditors and the trustee are allowed to ask the Debtor questions regarding their bankruptcy filing. Once the meeting of creditors is completed the debts are usually discharged within a 2 month period by the court. The bankruptcy discharge stays on the individual's credit report for up to 10 years for most purposes.

Allow one of you experienced Bankruptcy Attorney's lead you through the complete process from beginning to end. We will be by your side every step of the way. Don't be fooled by other firms where you meet with the attorney once and then your case is passed off to a legal assist to complete. The attorneys' at KM Law Group, will lead you through the complete process from your Initial Consultation to the discharge of your case.

Dischargeability Of Debts

The following debts are non-dischargeable in Chapter 7. If you file for a Chapter 7 bankruptcy, these debts can still be collected on once your case is over.

In addition, other debts may be declared non-dischargeable by a bankruptcy judge in Chapter 7 if the creditor challenges your discharge request. It is a rarity that you would have to retain our office to handle dischargeability issues. They include: