While most people don’t even realize just how many different types of bankruptcy there actually are, anytime anyone ever thinks about bankruptcy, they’re usually thinking of a Chapter 7.
Chapter 7 bankruptcy is the process a person takes when they essentially want to “discharge” their debt in exchange for liquidating and relinquishing all non-exempt property and assets. This basically means the person must petition the court and prove their financial impotence so a judge deems them ineligible for repayment, and they must at least earn less than the state’s official median income to qualify. Once that’s been determined and a judge agrees, Chapter 7 bankruptcy requires that all non-exempt property, meaning non-essential properties, vehicles, recreational vehicles/equipment, and other valuables, be surrendered and sold to cover the costs of your outstanding debts. If what is owed exceeds what can be paid after all property and assets have been ceded, any outstanding debts leftover are then just wiped clean – thus the grand appeal of filing for a Chapter 7 bankruptcy. Best of all, the whole process typically only takes a few short months, making Chapter 7 bankruptcy one of the fastest and least inconvenient ways to wash your hands of your overwhelming fiscal obligations!
There is, however, a lot about Chapter 7 bankruptcy many people don’t know. For instance, while Chapter 7 bankruptcy may look like the cure for all debt, it certainly isn’t. Student loan debts, child support and alimony obligations, taxes, and court restitution orders are just a few types of debt that cannot be forgiven with a Chapter 7 bankruptcy. You will also need to remember that while certain assets may be exempt from liquidation, a Chapter 7 bankruptcy cannot overrule a mortgage holder or auto financer’s right to repossess property and use it to pay off any delinquent debts. This is actually why it is so crucial you contact trained, experienced bankruptcy attorneys long before you try to file for Chapter 7, or any other type of bankruptcy.
Only seasoned bankruptcy attorneys, like ours at Harris Law, are going to be able to look at your case objectively and effectively guide you through the bankruptcy process while still keeping your best interests in mind. In fact, we’ll make sure whatever your circumstances are we will help you find a financial solution, whether that means filing for Chapter 7 bankruptcy or not. Learn more by reaching out and getting to know our fantastic bankruptcy attorneys today!