Chapter 7 Bankruptcy is known as the bankruptcy to “wipe the slate clean.” It is available to those who qualify needing a fresh start with little or no debt. The Bankruptcy Court appoints a Trustee (an attorney) to oversee the debtor’s case. Chapter 7 Bankruptcy is normally discharged within several months of filing the case. If you’re facing Chapter 7 Bankruptcy, Groce & DeArmon, P.C. can help.
The Trustee will review all the property and debts of the debtor to see what property can be kept and what needs to be sold, and what debts can be included in the bankruptcy. Individuals may be allowed to keep some exempt property. Other assets may be sold by the Trustee to repay creditors, or may work with creditors if the debtor chooses to continue payments or pay a settlement amount agreed to by the creditor and debtor. Groce & DeArmon, P.C. can advise you of what the Court will allow you to keep or need to be sold to repay debts. Any unsecured debts (debts not guaranteed by collateral such as credit cards) will be wiped out in the bankruptcy except debts for child support or spousal support, income taxes less than three years old, property taxes, student loans, and fines and restitution imposed by a court to the debtor.
There are certain factors the court considers. A debtor can only file a Chapter 7 Bankruptcy once every eight years. The gross income of the household from all sources averaged over 180 days from the date of the filing and the size of the household impacts what type of bankruptcy case a debtor can file. The amount of equity debtors have in property and whether if there is secured debts are also determining factors.
Under the Bankruptcy Code, debtors are required to complete credit counseling education before filing for bankruptcy and post-bankruptcy counseling education before the discharge by the Bankruptcy Court. This must be completed through a non-profit, Court approved agency that provides credit counseling.
Once the Bankruptcy is approved by the court, the Chapter 7 Bankruptcy will remain on the debtor’s credit report for 10 years from the date of filing the petition.
Contact Groce & DeArmon, P.C. for a free legal aid consultation to see if you qualify.