How does Chapter 7 Bankruptcy work?

How does Chapter 7 Bankruptcy work?

If you are considering filing a Chapter 7 bankruptcy for debt relief, it’s important to know the process of how it works. Chapter 7 is the most common and straightforward type of bankruptcy. It eliminates all of your unsecured debts including credit cards, medical bills, overdue utility bills, vehicle repossession deficiencies, negative bank balances, and money judgments.

Decide if a Chapter 7 Bankruptcy is right for you

You may wonder “Will I lose my possessions during a Chapter 7 Bankruptcy?” Your ordinary possessions are likely exempted and protected. The law allows you to exempt your automobiles, house, household goods and furniture, electronics, clothing, tools, jewelry, appliances, etc. However, luxury items like yachts and airplanes probably won’t be protected.

Decide if you need relief from secured debts such as overdue car loans and mortgages. Although your house and vehicles may be exempted, you may prefer to get rid of them if payments are overdue and in default. If you are behind on car loan payments, you can surrender the car and erase the loan debt. Same thing with your house if you are behind on mortgage payments and you want to get out from under a burdensome mortgage.

File your Chapter 7 Petition

A Bankruptcy Attorney can properly prepare your Chapter 7 Petition and Schedules and timely file them with the Court. Immediately, you will receive an Automatic Stay, which means all collection actions against you must stop, including foreclosures, repossessions, wage garnishments, court judgments, and even harassment from debt collectors.

Attend your 341 Meeting of Creditors

After your case is filed, you will attend a 341 Meeting of Creditors, where the Trustee will give you a short interview to make sure your Petition and Schedules are complete and accurate. This takes about five minutes. Creditors normally don’t attend, but the ones that might attend usually just want to politely ask if you prefer to surrender or keep a secured debt.

Receive your Chapter 7 Discharge

Soon after the 341 Meeting of Creditors, the final step is to Receive your Discharge. You receive this in the mail automatically. This means your Chapter 7 is complete, and you no longer owe the unsecured debts and the secured debts that you chose to surrender.

Contact a Bankruptcy Attorney to prepare and file your Chapter 7 case

If you need debt relief or have questions about Chapter 7 bankruptcy relief, contact us at Starks Law P.C. for a free consultation with an attorney. We listen to the needs and goals of every client and create a legal strategy tailored to that person and their case. We do not believe in the 'one size fits all' legal strategy employed by other firms. Every case is unique and we plan accordingly.

Representation from Starks Law begins with a simple phone call. We will review the circumstances surrounding your unique situation. After assessing the details, we will form an action plan tailored specifically for your case and goals. Additionally, we will do our best to answer any questions you may have so that you can make a fully informed decision on how to proceed. Take advantage of Chapter 7 bankruptcy debt relief to regain your financial freedom.