Chapter 7 is one of several forms of bankruptcy you can file if you have trouble paying your debts. What makes Chapter 7 unique is that you can often keep all of your assets rather than liquidate them. You would not have to make any more debt payments and could move forward with your life.
If you want to file Chapter 7 bankruptcy or still want more information about the types of bankruptcy available to you, an Orlando bankruptcy lawyer can help.
Key Aspects of Chapter 7 Bankruptcy
Chapter 7 is just one of several chapters a person may file under if they cannot repay their creditors. However, several factors set Chapter 7 apart from other types of bankruptcy, including the following:
- You can file as an individual or a business: Unlike other chapters, which are only available to one type of debtor, companies and individuals may file for Chapter 7.
- You can probably keep your assets: One of the pros of Chapter 7 is that you can keep all “nonexempt” assets. The average debtor has no nonexempt assets and can file without sacrificing any personal belongings or property.
- You do not need a repayment plan: Other forms of bankruptcy require you to devise a plan for repaying some of what you owe. Under Chapter 7, your debts are discharged, and your creditors will no longer contact you about those debts.
Nonexempt Assets and Chapter 7
When you file for Chapter 7 bankruptcy, you need to liquidate your nonexempt assets to pay off as much of your debt as possible. However, as previously stated, many people who file under this chapter do not have any nonexempt assets. You would be allowed to keep most, if not all, of the things that are most important to you, including:
- Your primary residence
- Your primary vehicle
- Your personal property, such as furniture and jewelry
- Tools or equipment you need to do your job
Other Aspects of Chapter 7 Bankruptcy
While Chapter 7 is unique in many ways, it has several factors in common with other chapters. According to the U.S. Courts, these include the following:
- You must have gone to a credit counseling agency within the past 180 days
- You cannot have had a prior bankruptcy motion dismissed within the past 180 days
- You must abide by the court’s rules throughout the process or risk having your case dismissed
To consult with an experienced bankruptcy lawyer today
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Should You File for Chapter 7 Bankruptcy?
This is a question that you and your family should not take lightly. There are many pros of filing for Chapter 7, such as expunging most or all of your debt. However, there are also numerous cons, including:
- The effect on your credit score: Filing for any type of bankruptcy will negatively impact your credit. This makes it harder for you to make large purchases or take out loans.
- The effect on you and your family: There is a stigma around filing for bankruptcy. You might have to deal with feelings of shame, failure, or embarrassment, no matter how unwarranted those feelings are.
- The limits of dischargeable debts: Chapter 7 only helps people with certain types of debt. For instance, it will not eliminate your student loans or court-ordered fines or restitution.
It may help to know that you are not alone. An attorney understands the legal and emotional difficulties of bankruptcy cases and can ensure the process goes as smoothly as possible. When you file for Chapter 7 bankruptcy with a lawyer’s help, you can be sure it is the right decision for your family.
How You Can File for Chapter 7
If you decide that Chapter 7 is the best possible choice for you, a bankruptcy attorney can help you meet all of the filing requirements, including:
- Submitting paperwork: It is essential that you file your case with the correct forms in the right venue. Your circumstances and location will determine both forms and venue.
- Collecting evidence: You want to prove that you are unable to pay your debts and have no nonexempt assets that the court can take from you.
- Proving you pass the means test: Only people with no reasonable hope of repaying their debts can file for Chapter 7. Your financial records can show that you pass this test and should proceed with filing.
- Representing you in court: You do not have to speak on your own behalf. Our attorneys can do all the talking and even arrange for your court hearings to occur virtually.
Even if your case goes relatively quickly, filing bankruptcy is never easy. While it is a good idea to consult a bankruptcy lawyer early on to avoid unnecessary mistakes or stress, you can hire legal representation at almost any point in the legal process.
What if You Are Ineligible for Chapter 7?
Chapter 7 bankruptcy is only an option for those in very particular circumstances. If you do not qualify for this kind of bankruptcy, you may still have other options. Our bankruptcy law firm can help you to better understand the pros and cons of:
- Filing for Chapter 13, which allows you the chance to save certain assets by presenting your debtors with a repayment plan
- Working with your creditors to consolidate your debt
- Going to a credit counselor, who can help you find a way out of debt
Is Chapter 7 Bankruptcy the Best Option for You?
Bogin, Munns & Munns can handle much of your case virtually, making a stressful bankruptcy process much more manageable. If you want to know what Chapter 7 bankruptcy is and if it is right for you, call us for a free consultation today. Our lawyers offer open communication and diligent, respectful representation.
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