CHAPTER 7 - Liquidation
What is a Chapter 7 Bankruptcy?
Chapter
7 is a liquidation of your assets that are not exempt under the
Bankruptcy Code. The debtor turns over his non-exempt assets (if any)
to a U.S. Bankruptcy Trustee. The trustee sells the assets and pays off
your creditors. You receive a "discharge" if you comply with the orders
and rules of court.
Do I qualifty to file Chapter 7?
The
ability to file Chapter 7 under the new law is very complicated. We
suggest you call us for an initial determination on whether you will be
able to file.
What happens to the harassing phone calls and letters from creditors when I file?
They
stop, period. It is illegal to attempt to collect on a debt listed in
your petition after you have filed. This is called an "automatic stay"
of proceedings against you.
What about any lawsuits that have been filed against me?
They
stop, too. The only way for it to continue is if the creditor has some
basis for obtaining relief from the automatic stay, and they have to
file a motion before the court to obtain that.
What debts cannot be discharged in banrkutpcy?
1. Any debts that could have been discharged in a prior bankruptcy but were.
2. Certain government fines and penalties.
3. Student loans that became due less than seven years ago.
4. Debts due to fraud or other illegal activity.
5. Certain Income taxes.
6.
Alimony, maintenance and support debts, and, if the creditor files a
complaint, some divorce related debts such as might be stated in
property settlement agreements.have t
Can I get rid of my DMV surcharges and get my driver's license reinstated?
Surcharges
can be partially discharged in bankruptcy. Surcharges can never be
discharged in a chapter 7 case. If a person files a chapter 7, then the
automatic stay will stop the MVS from their collection efforts to
collect the surcharges. This automatic stay protection will only last
for about six months, until the bankruptcy is over. Once the bankruptcy
is over, then the MVS will start their collection efforts again. Many
people are shocked when they realize that their surcharges are not
wiped out in the bankruptcy.
On the bright side, most of the surcharges can be wiped out in a
chapter 13 bankruptcy. Chapter 13 is a bankruptcy wherein a person has
to pay a portion of their debt over three to five years. In most cases,
a DWI driver in a chapter 13 case can pay $50 a month for three years.
If the DWI driver makes all of the bankruptcy payments, then they will
receive a discharge. Basically, the DWI driver can have most of their
surcharges wiped off if they make the plan payments.
Do I have to appear in Court?
In
Chapter 7, there is at least one court appearance the debtor must make
with his attorney. That is the first "meeting of creditors", or
"Section 341 Hearing". In actuality, it is not so much a meeting of
creditors as it is an examination of the debtor by the trustee
concerning all of the information placed in the bankruptcy petition.
Creditors are notified of the hearing and are permitted to come and ask
you questions under oath.
Am I allowed to continue to pay on some of my debt and keep those accounts open?
You
are permitted to "reaffirm" any debt, as long as it would not
constitute and excessive hardship upon you. The reaffirmation could be
contested by any other creditor if they feel that you are giving
preferential treatment to another in bad faith.
Do I have to surrender my home or car if I declare bankruptcy under a Chapter 7 Liquidation?
Not
necessarily. There are several exemptions you are entitled to when you
file bankruptcy. Depending upon the amount of equity in your home, you
will probably be able to keep your home and file bankruptcy. We would
have to do an analysis of the current market value of your home to give
you an accurate answer. What if I don't own a home. Do I lose out on the real estate exemption?
No, you don't lose out. Debtors who don't own a home gain an unused real estate exemption.
What if my mortgage is in arrears? Can I still keep the home?
If
you can become current on your mortgage and your equity is exempted,
then you could keep it. If you can't get current, then you must look at
the Chapter 13 options, below.
I filed bankruptcy before. Can I file again? What happens if I forgot to list a debt in my prior bankruptcy?
You
can file Chapter 7 six years after your previous Chapter 7 discharge.
You can file Chapter 7 or 13 any time after completion of your Chapter
13 bankruptcy.
If you forgot to list a debt in your
prior bankruptcy in a Chapter 7 no-asset case, the general rule now
followed by most bankruptcy courts is that debts owed to unlisted or
improperly listed creditors are dischargeable under Section 523(a)(3)
even if the creditor did not receive notice or have knowledge of the
bankruptcy case until after the discharge was granted and the case was
closed, provided that (1) the omission of the creditor from the
debtor's schedules was inadvertent and not intentional or fraudulent,
and (2) the debt is not a debt obtained by fraud, falsity or a false
financial statement and is not a debt for fiduciary fraud or willful or
malicious injury.
What does it cost to file?
The
filing fee for Chapter 7 is $299 that gets paid to the United States
Bankruptcy Clerk. The legal fees vary depending upon many factors,
including the number of creditors and whether real estate is involved
in the bankruptcy.
Have a Question?: Bankruptcy Questions
|
