Chapter 7 is a form of bankruptcy that allows you to liquidate assets to payyour unsecured debt and any remaing debt is discharged. Common examples of unsecured debts are credit cards, medical bills, payday loans, signature loans, repossession deficiencies, and judgments. If you stop paying unsecured debt there is not any property that the creditor can take from you because there is no collateral.
It is very common for people to get in over their head with credit card debt while shifting balances from one card to another. You’ve probably experienced it yourself. The lure is enticing with zero percent interest and free money. You would file Chapter 7 after you have exhausted all of your non bankruptcy options. However, it is all too common for people to make minimum payments for years, and attempt to work with their creditors, just to find themselves worse off than when they started. Therefore, Chapter 7 Bankruptcy is a responsible way for you to reorganize your finances, liquidate your debt, and achieve the fresh start you deserve. If this sounds like something you are interested in, please set a consultation with Wrisinger Law Firm today. We dedicate ourselves to filing bankruptcy cases, and would be happy to assist you on your journey to financial freedom.
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What are the Benefits of Chapter 7 Bankruptcy?
The most common benefit of a Chapter 7 Bankruptcy is the speed in which you can achieve a fresh start. There are no payments to your creditors. You simply work with a qualified attorney to prepare the necessary bankruptcy schedules and file your case. One advantage of filing Chapter 7 Bankruptcy is that it provides you with a complete discharge of your debt within four to six months of the filing of your case.
Another distinct advantage of Chapter 7 Bankruptcy is that creditors are required to comply with the bankruptcy code and must stop the following actions: harassing collection calls, garnishment of wages, pursuit of judgments through lawsuits, repossession and foreclosure. A third advantage of Chapter 7 Bankruptcy, which is often overlooked, is that your credit could potentially be rebuilt faster after filing a Chapter 7 Bankruptcy than by not filing at all. Furthermore, many people are surprised that they are actually able to keep most of their property which can include your house, cars, retirement accounts, cash, and all household goods and furnishings. If you would like more information on how you can pursue Chapter 7 Bankruptcy, please fill out our online evaluation form.
Who Can File for Chapter 7 Bankruptcy?
Individual consumers are eligible to file a Chapter 7 Bankruptcy provided they meet the following criteria:
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All Debtors filing Chapter 7 Bankruptcy must pass a means test. The means test is a form that compares the Debtor’s income and expenses to the national IRS standards. This form is best completed by a skilled and qualified attorney. It is our experience that Debtors who previously qualified under the old bankruptcy laws, still qualify with the new bankruptcy laws.
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In addition, Debtors are only eligible to file for Chapter 7 Bankruptcy and receive a discharge of their debts eight years after a prior chapter 7 discharge.
How Long Does a Chapter 7 Bankruptcy Last?
Chapter 7 Bankruptcy only takes a few months to complete.
The first step is to call or come into our office for a consultation. Our experienced bankruptcy attorneys will sit down with you face to face. They will evaluate your debt and income situation as well as provide you with options for your unique situation.
After that consultation, if Chapter 7 Bankruptcy is right for you, you will work with our office to prepare your bankruptcy petition. We will then carefully review your case and ensure that we have all the necessary documents to provide to the Court. Once everything is in order, we will then file your case. After your case is filed you can expect to attend a bankruptcy conference with your assigned Chapter 7 Trustee. This meeting normally lasts five to ten minutes. It is not in a courtroom or in front of a bankruptcy Judge. Within two or three months from the meeting you can expect to receive your discharge. A discharge is the court order that eliminates your legal obligation to pay a debt. There are two online courses that you will need to complete, namely credit counseling and financial management. One course will be taken prior to the bankruptcy being filed and the second course is taken after the case is filed, but prior to discharge.
Can I keep my property in Chapter 7 Bankruptcy?
One of the biggest myths about Chapter 7 bankruptcy is that you are going to lose all of your property. Missouri and Kansas each have their own exemptions. There are some situations which require the use of Federal exemptions. It is important to consult with an experienced bankruptcy attorney who can advise your on the use of exemptions to protect your property.
Although the property is exempt, if you want to keep the property and you still owe money on it, you will have to continue to pay for it. Chapter 7 Bankruptcy provides you the means to reaffirm the debt and continue making payments on it. At the completion of the payment plan, the title, or lien, will be released and you will own the property free and clear. If you are interested to see if you will be able to keep most of your property and how exemptions affect you, please call to set an appointment.
How does Chapter 7 Bankruptcy affect my credit?
Many Debtors are surprised when they learn it is possible to actually have a higher credit score within one year after completion of a Chapter 7 bankruptcy than if they had not filed. The truth is that bankruptcy is a negative reflection on your credit; however it is not the only factor creditors use when making a lending decision. Some of the positive effects that you will experience upon completion of your bankruptcy are as follows:
First, all of your eligible unsecured debt will be discharged. Therefore your debt to income ratio will be much improved.
Second, the negative payment history that is being used against you when creditors making lending decision will be gone, and the line items on your credit report will show “Discharged in Bankruptcy.” Everyday that you put between the discharge of your case and the rest of your life, will continue to improve your credit score.
Third, by continuing to make payments on the secured debts that you have elected to keep, such as a house or car, will establish a positive payment history. Most of my clients experience the ability to purchase a new home or car within one year of their bankruptcy discharge. It is also common to receive credit card offers right after you are discharged. Much is made about the fact that the bankruptcy discharge will appear on your credit for up to ten years after your bankruptcy, but the fact that bankruptcy appears on your credit does not mean that you will not experience positive lending opportunities.
You can find out how filing for relief from your debts through Bankruptcy may actually increase your credit score by completing a few simple steps.