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Chapter 7 Overview
Qualifying for Chapter 7
Advantages of Chapter 7 Protection
Can I keep my house or car?
Disadvantages of Chapter 7 Protection
The Process of filing for Chapter 7 Protection
Additional Requirements
What information should I provide at the initial consultation?
What happens after the initial consultation?

 

Chapter 7 Overview:   
Federal law allows persons to obtain protection from debts, and relief from creditors pursuing payments of those debts. In Chapter 7 bankruptcy, a person may discharge their debts. The federal Court appoints a Trustee to oversee the process. It is important to note that Chapter 7 bankruptcy may not discharge all debts. Chapter 7 bankruptcy does not discharge debts for most taxes, child support and alimony, most student loans, court fines and criminal restitution, and personal injury caused by driving drunk or under the influence of drugs.


Qualifying for Chapter 7:   
Qualifying for Chapter 7 bankruptcy is based on the assets you own and income that you receive. You are allowed exemptions for real estate, personal property, and cash on hand on the day you file your bankruptcy petition. You are allowed to have a reasonable amount of income and still qualify for Chapter 7 protection. During a free initial consultation, an attorney will explain what amount of assets you may retain, and what level of income will allow you to file under Chapter 7.


Advantages of Chapter 7:   
The biggest advantage from receiving Chapter 7 protection is that you receive a fresh start. You can now use your income to provide for your current needs, rather than trying to pay off old debts.


Can I keep my house or car?:
Under Chapter 7 bankruptcy, you may choose to reaffirm the debt that you currently owe on your house or on your vehicles. Some restrictions apply, and the attorney can advise you whether reaffirmation is appropriate for you.


Disadvantages of Chapter 7 Protection:  
You bankruptcy is reported on your credit report for up to ten years. This may affect your ability to obtain credit after the bankruptcy, and increase any interest costs on credit that you do obtain. You are also not allowed to again file under Chapter 7 for eight years.


The Process of filing for Chapter 7 Protection:   
At an initial consultation, the attorney will gather information from you to determine whether you can qualify for Chapter 7 protection. The attorney will also examine your debts to determine whether Chapter 7 is appropriate and helpful for your particular situation. The attorney will explain the different steps you must take, and will provide you with a packet to fill out and return. This packet will contain the information needed to file your petition. Once you have returned your packet and paid in full, the attorney will review you petition with you to ensure its accuracy and completeness. We then file your petition with the Court and receive a hearing date. On that date you will appear before the Trustee at a Meeting of the Creditors. This is a short hearing, at which you will be asked a series of questions. Even though you will be under oath, this is an informal hearing. The attorney will also attend this hearing. The next step is to receive your discharge.


Additional Requirements: 
You must also take a pre-filing credit counseling course and a post-filing debtor education course. There is a small fee required for each course. These courses can be taken online, and can provide helpful information as you navigate the bankruptcy process. Additionally, we require that you obtain all three of your credit reports. Free copies of each of the reports are available once per year at www.annualcreditreport.com.


What information should I provide at the initial consultation: 
At your initial consultation, you should bring information concerning your gross income (as well as your spouse's income if filing jointly), the value of an amount owed on your house and vehicles, and a list of the amount of debt that you currently owe.


What happens after the initial consultation?: 
You have several choices following your initial consultation. You are under no obligation to do anything. You may decide to pursue Chapter 7 Protection. You may decide that Chapter 7 Protection is not necessary, or that it is not available in your circumstances. You may also decide to take the materials provided by the attorney and spend some time making this important decision.





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