Frequently Asked Chapter 7 Bankruptcy Questions
If you're considering filing for Chapter 7 bankruptcy, you’ve probably got at least a few questions. And that's smart: bankruptcy is a big step, and it's important to learn as much as you can before you file.
If you'd like to ask your Chapter 7 bankruptcy questions directly to a bankruptcy lawyer, please fill out this form. You can arrange a free, no-obligation consultation with an attorney near you today.
Chapter 7 Bankruptcy: Q&A
Take a look at some common questions people have about Chapter 7 bankruptcy:
- What is Chapter 7 bankruptcy? Chapter 7 is a type of personal bankruptcy sometimes referred to as "liquidation". This is because, as part of a Chapter 7 case, a filer's bankruptcy trustee may liquidate (that is, sell off to raise cash) any non-exempt assets and use the money to repay creditors in part. After the liquidation sale, filers are offered a full discharge of some or all of their unsecured debt.
- What is a non-exempt asset? Each state has a list of Chapter 7 exemptions that details what sorts of property Chapter 7 filers can hang on to when they file their cases. Most states offer exemptions for a car, a home, clothes, books, work tools and other necessities. In fact, many Chapter 7 filers find that they have no non-exempt property.
- Who is eligible for Chapter 7 bankruptcy? In order to qualify for Chapter 7 protection, filers must first pass a means test, which compares their incomes to those of families their size in the same state. Generally, if your income falls below the median or if you have particularly high expenses, you should qualify.
- How long does Chapter 7 bankruptcy last? Most Chapter 7 cases tend to move quickly, and filers can get their discharge in as little as four to six months. Your bankruptcy lawyer can explain how this process works in more detail.
- Do I really need to work with a bankruptcy lawyer? Legally, you are not obligated to hire a lawyer to help you. But many knowledgeable sources (including the U.S. government, which wrote the laws involved) recommend enlisting legal help with your bankruptcy case. That's because bankruptcy laws are complex and detailed, and if you file your case on your own, you could risk having it dismissed for a missed deadline or some improperly filed paperwork.
- What kind of debt can Chapter 7 bankruptcy discharge? Chapter 7 bankruptcy can help with certain types of unsecured debts (meaning debts that are not linked to any property), including credit card debt and medical debt. It's important to know, though, that Chapter 7 has no power to discharge other types of unsecured debt (including student loans, child support, alimony, tax debts and criminal fines).
Ask an Attorney about How Chapter 7 May Relate to You
If you're ready to learn more about personal bankruptcy (whether its learning more about Chapter 13 or if you have Chapter 7 bankruptcy questions not addressed here), you can take advantage of this opportunity to connect with a attorney practicing near you.
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