If you are filing for Chapter 7 bankruptcy, you probably have a few questions. Actually, you almost certainly have a lot of questions. Who wouldn’t? Filing for bankruptcy is never fun, but it’s often made more difficult because of mischaracterizations or misunderstandings. There are a few things that people are filing for Chapter 7 bankruptcy should know before filing and as they go through the process. In today’s blog post, Groce & DeArmon, P.C. addresses some of the common questions regarding Chapter 7 bankruptcy so that you are fully informed when you file.
What is Chapter 7 Bankruptcy?
Chapter 7 bankruptcy is the most common form of bankruptcy and, subsequently, it is also the simplest. With Chapter 7, a court-appointed trustee takes control of all of the debtor’s assets not protected by exemptions. The trustee may then sell those assets and distribute the revenue to priority creditors. In exchange for these assets, the debtor gets a discharge from his personal liability on qualifying debts.
What Debts Are Qualifying?
With Chapter 7, this answer is simpler than its sibling, Chapter 13. All debts are released by a Chapter 7 discharge except for a list of roughly 16 disqualified debts. These disqualified debts include certain tax debts, debts not listed in your Chapter 7 papers, alimony, and some loans.
Am I Eligible?
Any person who resides, does business, or owns property in the United States is eligible to file under Chapter 7. The only exception is for a person or persons who have been involved in another bankruptcy case that was dismissed within the last 180 days. There are more exceptions for those seeking a Chapter 7 discharge, however.
The bigger question is whether or not you should file under Chapter 7.
Should I File Under Chapter 7?
This depends completely on your individual situation. The immediate results are less than optimal, with you losing all of your assets, credit cards, and even perhaps your property.
Chapter 7 will also do a number on your credit score and can remain on your credit report for up to 10 years.
However, the long-term results are often worthwhile. For those worried about their credit scores, those scores are also impacted by missing payments, defaulting, and having assets repossessed, which will likely happen without debt relief.
Let Groce & DeArmon Help
At Groce & DeArmon, we specialize in Chapter 7 bankruptcy and want to help you find the best possible solution. Contact us at (417) 862-3706, call us toll-free in Missouri at 1 (800) 640-3706 or visit our website for more information.