Chapter 7 Bankruptcy
A Chapter 7 bankruptcy or liquidation bankruptcy allows qualifying debtors to discharge the majority of their unsecured debts (i.e. - credit card balances, medical bills, personal loans and certain taxes). A Chapter 7 bankruptcy eliminates unsecured debts while allowing debtors to typically protect all of their property through state law exemptions.
Process of Chapter 7 Bankruptcy
- Initial Comprehensive Consultation
- Retain Attorney
- Pay Attorneys Fees
- Complete Pre-Filing Credit Counseling Course, required by law (available online)
- Attorney Completes Preparation of Bankruptcy Petition
- Attorney Reviews Bankruptcy Petition with Client
- Client Signs the Bankruptcy Petition and Petition is Filed with the Court
- Complete Mandatory Post-Filing Debtor Education Course, required by law (available online)
- Attend 341(a) Trustee's Meeting with Attorney Present
- Await Discharge from Bankruptcy Court
Reaffirming Debts/Keeping Your Car
Debtors with car loans can keep their car even though they have filed for bankruptcy by reaffirming the contract. This means the car loan survives the bankruptcy.
Debts that Are Not Dischargeable
Certain debts like domestic support obligations, most student loans, recent income taxes, malicious personal injury lawsuits and fraudulently incurred debts are not dischargeable.