Chapter 7 Bankruptcy

 

The most common reasons you may find yourself needing to file bankruptcy are due to unemployment, overextended credit,  health issues and large medical expenses. If you qualify for a Chapter 7 Bankruptcy, it may allow you to discharge a variety of debts. The greatest benefit for a Chapter 7 bankruptcy is that it erases most of the debts; however, allowable debts to be discharged typically exclude obligations such as child support, tax debt, and student loans. 

What does filing involve?

  1. It is required to complete bankruptcy counseling within the last 180 days prior to filing though an approved agency.
  2. In order to show that you are eligible to file a Chapter 7 bankruptcy, you will need to show that you have passed a “means test”. A means test will show whether your income exceeds a certain amount based on your particular state’s income standards.
  3. The filing of the petition will include paying the required court fees. You will also be required to submit additional information regarding your income and expenses, along with providing the Trustee with your most recent tax returns.
  4. You will be scheduled for a Meeting of Creditors with your assigned Trustee. This is also known as a “creditor meeting” , where any of your creditors can choose to appear. You will be required to answer questions about your property, debt, and financial situation under oath.
  5. Similar to the bankruptcy counseling completed prior to the bankruptcy filing, a financial management course is to be completed within 60 days of the scheduled Meeting of Creditors.
  6. At the end of a successful Chapter 7 filing, you will receive your Order of Discharge. Creditors are no longer able to attempt to collect on a debt that has been discharged.  Keep in mind, that not all of your debts are dischargeable in bankruptcy.

Although the record of your bankruptcy can stay on your credit for several years, it doesn’t particularly mean you’re in the worst situation. Lots of filers have been able to buy homes with bankruptcies on their record. For many people, a Chapter 7 filing can offer the quick, fresh start they needed. Feel free to call our office at 305-227-4030 or emails us at legal@raygarcialaw.com if you have any questions or concerns.