If you are overwhelmed by debt, Chapter 7 bankruptcy may offer the best chance to dismiss this debt completely. This chapter of bankruptcy discharges unsecured debt, such as credit cards and medical bills, and shields many family assets. It also protects you from creditor harassment, law suits, foreclosure sales, car repossession, and wage garnishment.
LA Legal Law Firm bankruptcy attorney can help guide you through the process and decide whether filing is the right choice for you and your family.
Chapter 7 Bankruptcy Ends Creditor Harassment
Upon filing, the bankruptcy court will issue an automatic stay, halting all debt collection attempts against you. Creditors listed in your paperwork will be notified to cease collection activities. This includes lawsuits, wage garnishments, and any attempts to contact you, reducing the stress on your family.
Chapter 7 Protects Assets
Filing for Chapter 7 does not always mean you must give up your home, car or other valuables. Though some property may be liquidated, exemptions are available for most personal property and real property assets. After unsecured debts are discharged, you may keep your car through a reaffirmation agreement, and stay current with mortgage payments to remain in your home.
The circumstances of each case are unique and any bankruptcy has consequences. But if you qualify, Chapter 7 bankruptcy doesn’t require you to be left empty handed. Instead, much of your debt may be wiped out, giving you an opportunity to rebuild. If you are unable to qualify for Chapter 7 bankruptcy, you may be able to file for Chapter 13 bankruptcy. LA Legal Law Firm will help you with bankruptcy workout options.
Frequently Asked Questions
WHO IS ELIGIBLE TO FILE CHAPTER 7 BANKRUPTCY?
To qualify for relief under Chapter 7 bankruptcy of the Bankruptcy Code, the following applies:
WHAT IS A CHAPTER 7 BANKRUPTCY DISCHARGE?
A Chapter 7 bankruptcy discharge means that your qualifying debt is discharged. It includes your unsecured debt such as credit cards, medical bills, and personal lines of credit.
CAN A CHAPTER 7 BANKRUPTCY ELIMINATE A SECOND MORTGAGE?
No, Chapter 7 bankruptcy does not have the power to eliminate a second mortgage. However, Chapter 7 is great for those who want to quickly eliminate credit card debt without having to make payments to creditors.
CAN EMPLOYERS DISCRIMINATE BASED ON A BANKRUPTCY FILING?
No. It is illegal for both private and governmental employers to discriminate against a person as to employment because that person has filed for bankruptcy under Chapter 7. Your employer cannot fire you if you file for bankruptcy.
WILL BANKRUPTCY AFFECT A SPOUSE’S CREDIT?
Generally not. When one spouse files for bankruptcy, as long as none of the debts scheduled by you are joint debts with your spouse, your spouse’s credit is generally not affected.
MAY A HUSBAND AND WIFE FILE JOINTLY UNDER CHAPTER 7 BANKRUPTCY?
Yes. A husband and wife may file a joint petition under Chapter 7 bankruptcy. If a joint petition is filed, only one set of bankruptcy forms is needed and only one filing fee is charged.
HOW LONG DOES BANKRUPTCY REMAIN ON A CREDIT REPORT?
Bankruptcy will remain on an individual’s credit report for ten years.
WILL CHAPTER 7 BANKRUPTCY STOP A WAGE GARNISHMENT?
Yes. Some of the money garnished from your paycheck may even be returned to you, depending on how much was garnished and when it was garnished. If your wages are currently subject to garnishment, a Notification of Stay must be mailed to the creditor and your employer in order to stop the garnishment after your bankruptcy petition is filed.
WILL CHAPTER 7 BANKRUPTCY PERMANENTLY STOP A FORECLOSURE?
No, chapter 7 bankruptcy is not a permanent solution to a foreclosure. However, Chapter 7 bankruptcy will effectively buy you extra time to make a decision regarding the property.
CAN YOU APPLY FOR A LOAN MODIFICATION AFTER FILING CHAPTER 7 BANKRUPTCY?
Yes. Most lenders are still willing to consider loss mitigation efforts such as loan modification despite a recent bankruptcy.
WHEN WILL A CHAPTER 7 BANKRUPTCY CASE OVER?
Your Chapter 7 case is not over when you get your discharge. In most Chapter 7 cases, the discharge of debts will occur 60 to 90 days after the weeting of creditors. However, your case is not over until the Trustee has fully administered your assets. This can include any tax refunds still owed to you on the date that you filed your bankruptcy case and the tax refund for the year that you filed. If the Trustee determines to administer any of your assets, it can take six months to a year for your case to close.