Chapter 7: Personal Bankruptcy

Stop creditor harassment and get a fresh financial start!

Chapter 7 is the most common form of Bankruptcy filed in the U.S. It is designed to help individuals and businesses eliminate debts they cannot pay. Once you have filed for protection with the Court, your creditors are required by law to stop all collection activity against you. No more telephone calls demanding payment, lawsuits, wage garnishments and best of all, no more debts! In general a

Chapter 7 Bankruptcy will wipe out most of your debts, stop wage garnishments, repossessions and harassment which will allow you to control your financial future have peace of mind and get a fresh start.

Chapter 7 does not have a repayment plan. Since Chapter 7 does not contain a repayment plan, if you are significantly behind on your mortgage payments, filing a Chapter 7 will only postpone a foreclosure sale of your house, but eventually will not save it from a foreclosure.

Keeping your Property

In most Chapter 7 cases, the person filing Bankruptcy keeps all of their property. Within certain limitations you keep your household items, car, jewelry and clothing! Bankruptcy law is not meant to punish you; it allows you to keep your property under what are called "exemptions" (things you get to keep) and give you a fresh financial start. Under Bankruptcy Law, your non-exempt property may be sold to pay some of your debts, however, only a small percentage of cases have property sold. You will need guidance in this area, and we do this as part of our Bankruptcy representation. 

Unsecured debts, such as credit card debt, personal loans, money judgments and certain older taxes are wiped out in a Chapter 7. However, certain debts are not dischargeable under Chapter 7; most student loans, recent taxes, alimony, child and court ordered support payments and drunk driving judgment.

If a debt is secured by property, such as a home mortgage or an automobile loan, you have options on how to handle that debt. For example, you could (1) keep the house or automobile and the debt (as long as you are current and continue keeping them current) (2) "redeem" the automobile (pay it off at it’s current "fair market value") or (3) return the home or vehicle, and any balance due is included in your bankruptcy and the balance of the debt is wiped out.