Chapter 7 Bankruptcy

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Chapter 7 Bankruptcy

Chapter 7 bankruptcy is also known as straight bankruptcy and it is the most common form of bankruptcy in the United States. Chapter 7 differs from other forms of bankruptcy because, unlike chapter 11 or chapter 13 bankruptcy, your debts are not reorganized. Instead, when you file chapter 7 bankruptcy certain assets are liquidated, or turned into cash, and divided among your creditors, and then any of your remaining debts are discharged, or canceled.

Chapter 7 is the most commonly filed bankruptcy

Who Can File Chapter 7 Bankruptcy? Someone who uses Chapter 7 has few or no assets available to pay creditors, and the discharge applies to most debts. Discharge means your debts are abolished and cannot resurface against you again.

    • A debtor must qualify to file Chapter 7 based on their household income and a means test set out in the bankruptcy law (this does not apply to debtors whose debts are primarily non-consumer debts, i.e., business debt or student loans).
    • You keep exempt property, which is protected from your creditors’ reach. Exemptions are usually State specific and Florida has exemptions for your home, car and personal property. Also, Florida provides additional exemptions to those debtors who do not own a home or are losing a home to foreclosure.
    • The Chapter 7 discharge applies to the most common debts, including credit cards, medical bills, foreclosure deficiencies and repossessions. Not all debts can be discharged however.
    • The Majority of Chapter 7 cases are “no-asset” cases, meaning that the debtor has nothing left to pay the creditors after accounting for their property exemptions.
    • You should consult with a bankruptcy attorney to learn more about what debts you can discharge and what exemptions you may have available to you.

Chapter 7 Bankruptcy Lawyers Declaring bankruptcy is a decision that will have a substantial effect upon your life and finances. Make sure your decision to declare chapter 7 bankruptcy is thought through carefully and you speak with a knowledgeable attorney before you pursue this course of action. At Alliance Legal Group, our bankruptcy lawyers can walk you through all options for resolving your debt and help you determine what path is best for you. Call our firm today at (877) 560-4440 to set up your free initial consultation. We are proud to present our clients with affordable legal services and flat fees. If you are facing financial hardships, we can also work with you to set up a payment plan that is tailored to your budget.