Chapter 7 Bankruptcy Basics

 

Understanding bankruptcy can be a hard task. If you are working with an attorney, it can be made easier, but there are a lot of legal terms and explanations you may not understand. If you’re working with your lawyer on chapter 7 bankruptcy, the following information should give you a bit of clarity on some things.

How Does the Process Work?

The process of filing for chapter 7 bankruptcy isn’t as complicated as it may seem. First, the court will put a temporary stay on your debts. This prohibits creditors from foreclosing your home, collecting payments, evicting you, garnishing your wages or other similar actions. The court will actually have possession of your property during this time and a trustee will be assigned to your case.

The trustee will work with you to determine what your financial situation is like. He or she will begin to sell your property so you can pay your creditors back. The trustee will put together a creditor meeting at which you will meet in court with your creditors to answer any questions a judge may have.

After selling as much property as legally possible, and fulfilling as many debt obligations as possible, the court will discharge whatever debts you have left. There are some debts you will be unable to discharge including court fees, child support, student loans and other similar obligations.

What Are the Qualifications?

To qualify for chapter 7 bankruptcy, you’ll need to meet a few requirements. These include:

  • Completing a credit counseling course within a certain time frame before filing.
  • Not having filed chapter 7 bankruptcy within the last eight years.
  • Not having filed chapter 13 bankruptcy within the last six years.
  • Waiting a minimum of 181 days after having a bankruptcy case dismissed.
  • Having an average income less than the state’s median income, or having passed a means test.

Are There Any Debts That Will Remain?

When you file for chapter 7 bankruptcy, most unsecured debts will eventually be discharged when the process of selling property and paying off debt is complete. This includes medical bills, credit card debts, personal loans and other similar debts. Some unsecured debts that will typically remain include alimony and child support, HOA fees, court fees, student loans, personal injury debt resulting from your intoxication, and tax debt.

Getting In Touch With a Bankruptcy Attorney

If you’re filing chapter 7 bankruptcy, you’ll probably want to do everything you can to understand at least the basics of it. Get in touch with a bankruptcy attorney, like a bankruptcy lawyer in Phoenix, AZ from Kamper & Estrada, PLLC, today to learn more.