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Chapter 7 Bankruptcy

Chapter 7 Bankruptcy FAQs

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Chapter 7 Bankruptcy on Post-It Note Near Pen on a Desk

Filing for bankruptcy feels like a choice of no choices. You have bills piling up, yet you don’t want anything to affect your credit score or ability to live later in life. 

You also want to take care of your family, and you’re concerned for your children and loved ones who depend on you.

You may also feel like a failure. Declaring bankruptcy does not mean you failed. Sometimes, life happens and you need a fresh start.

We understand, and we’re here to offer you help and hope. Groce & DeArmon, P.C., can help you file for Chapter 7 bankruptcy.

We answer frequently asked questions about Chapter 7 bankruptcy in today’s blog.

What is Chapter 7 bankruptcy?

Chapter 7 bankruptcy offers a legal way for individuals to discharge many types of unsecured debts so they no longer owe money for those debts.

What types of debts can I get rid of with Chapter 7 bankruptcy?

  • Credit card debt
  • Medical bills
  • Personal loans 
  • Unpaid utility bills
  • Phone bills
  • Judgments from unpaid bills, such as credit card bills, medical bills, and unsecured loans

Who oversees Chapter 7 bankruptcy?

The U.S. (Federal) Court system appoints a trustee to oversee each case. The trustee makes sure each creditor receives any assets under the scope of bankruptcy, such as a house, and handles any concerns at a creditor meeting. 

How do I qualify for Chapter 7 bankruptcy?

You must pass the means test, which assesses whether or not you have extra income to pay your debts. Your income must either be 1) Below a state’s minimum requirements or 2) Have more expenses than disposable income over the past six months. 

You can only file for bankruptcy once every eight years.

How long does it take to finish a Chapter 7 bankruptcy filing?

Anywhere between four to six months from the time you file for Chapter 7 bankruptcy until the court finalizes the filing to make it official. During this time, creditors cannot collect debts from you.

How does Chapter 7 affect my finances after I file?

You will likely lose some property of some kind, like a house or perhaps a vehicle, when filing for Chapter 7 bankruptcy. Bankruptcy filings generally stay on your credit report up to 10 years after you file, so creditors will see this. 

However, you can start to rebuild your credit immediately after your Chapter 7 bankruptcy is formally discharged.

Who can help me file for Chapter 7 bankruptcy?

An attorney can help you file for Chapter 7 bankruptcy. 

Contact the dedicated bankruptcy attorney at Groce & DeArmon, P.C., or call 1-800-640-3706 in Missouri or (417) 862-3706 for a free initial consultation. 

Chapter 7 Bankruptcy Attorneys FAQs

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Chapter 7 Bankruptcy Sign on a Notebook in Black and White

The experienced bankruptcy attorney at Groce & DeArmon, P.C., based in Springfield, Missouri, answers several frequently asked questions about Chapter 7 bankruptcy attorneys.

Related Post: Pros and Cons of Chapter 7 Bankruptcy

Should I hire a lawyer to file Chapter 7 bankruptcy?

The U.S. federal court system highly recommends seeking the advice of a licensed attorney because filing for Chapter 7 bankruptcy has long-term financial and legal outcomes.

Why should I hire a Chapter 7 bankruptcy attorney for my case?

An experienced attorney familiar with Chapter 7 bankruptcy cases helps you manage the process during a complicated situation. Every bankruptcy case is unique, and a licensed attorney can help you have a more straightforward, faster, and more successful filing process by meeting deadlines, filing the correct paperwork, and managing your case.

What are the benefits of hiring a bankruptcy lawyer?

A Chapter 7 bankruptcy attorney can help you in many ways, such as:

  • Explaining bankruptcy procedures and legal principles.
  • Assisting you with all aspects of your case.
  • Advising you on whether to file bankruptcy, what type of bankruptcy is appropriate, and the tax consequences of filing.
  • Determining which of your debts can be eliminated (discharged).
  • Discovering what property you can keep, like your home, car, or other high-value items.
  • Talking to you about whether you should continue to pay creditors.
  • Helping complete and file necessary forms.
  • Following the rules and procedures of the U.S. Bankruptcy Court and Federal Rules of Bankruptcy Procedure, as well as local court rules.
  • Discussing your case with creditors and the bankruptcy trustee.

Related Post: What to Do If You Can’t Afford to File for Chapter 7 Bankruptcy

How much does an attorney charge for Chapter 7 bankruptcy?

Attorney fees vary greatly. The filing fee for Chapter 7 is $338. Average fees can range from $500 to $3,500, according to NerdWallet. 

Some firms can work with you to have a payment plan. Groce & DeArmon, P.C., offers a low down payment before owing the balance in payments.

Many Chapter 7 bankruptcy firms, including Groce & DeArmon, P.C., offer free initial consultations before you owe any money.

How often should I meet with my bankruptcy attorney?

After the initial consultation, you might meet with your bankruptcy attorney once every couple of weeks to discuss your case. You can call your attorney’s office to speak to someone over the phone when you have questions. Meetings may become more frequent once your court date approaches.

Do I need to go to court with my Chapter 7 bankruptcy attorney?

Yes, you will need to appear in federal bankruptcy court with your attorney. Make sure you arrive a few minutes before your appointed time. Your attorney will advise you as to what to expect during your court date. The judge will probably ask you a few questions. 

Related Post: 6 FAQs About Finding the Right Credit Counselor After Filing for Chapter 7 Bankruptcy

How many Chapter 7 bankruptcy attorneys are near me?

In Springfield, Missouri, there are around half a dozen law firms that specialize in bankruptcy filings. 

If you have any questions on how we can help, reach out to Groce & DeArmon, P.C., today. We’re happy to assist you in any way we can.

What to Do If You Can’t Afford to File for Chapter 7 Bankruptcy

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Bankruptcy Petition Under a Gavel

The filing fee for a Chapter bankruptcy is $338. However, if you can’t afford the fee plus your attorney fees, there are still ways to file. Here are several solutions from the attorneys at Groce & DeArmon.

Related post: Can You Still Have a Bank Account With Chapter 7 Bankruptcy?

How to Pay for a Chapter 7 Bankruptcy Filing Fee

If you don’t have the money to pay the $338 fee to file Chapter 7 Bankruptcy or you need to pay in several small installments, you have a few options that may help.

  • Apply for an installment payment plan. If you have a steady income stream, you can apply to pay the court filing fee for Chapter 7 bankruptcy in installments. That means, your payments will be smaller and spread out over several months to make the cost more manageable. You will need to fill out a form to apply. Once your application is submitted, a hearing will be scheduled and the court will either approve or deny your request.
  • Apply for a filing fee waiver. You can also apply for a Chapter 7 filing fee waiver if you cannot pay the fee, even with installments. You’ll have to meet certain eligibility requirements, including not being able to pay the fee in installments over 120 days and having a family income that is not more than 150% of Missouri’s poverty level. To get the fee waived, you’ll need to fill out an application and provide in-depth information about your income, family size, expenses, and more.

How to Pay Your Attorney Fees for Chapter 7 Bankruptcy

Representing yourself for a Chapter 7 case is not generally recommended. If you owe priority debts like taxes or child support, your case will be more complex and you’ll need to have more knowledge of bankruptcy law to accurately understand how it applies to you. Additionally, if you don’t comply with the court’s requirements, your case could be dismissed. To avoid all that, it’s best to hire an attorney. So how will you pay the fees?

  • Payment plan for attorney fees. In most cases, an attorney will offer a payment plan so you can cover their attorney fees over a greater period of time. However, one important thing to keep in mind is that you’ll have to pay the entire attorney fee before you file for bankruptcy.
  • Apply for pro bono bankruptcy services. In every state (including Missouri), you can apply for free legal representation for your bankruptcy case through a legal aid organization. However, you’ll need to meet the income eligibility criteria to use these free services. In Missouri, your family’s income must not be more than 125% of federal poverty levels.

Related post: 6 FAQs About Finding the Right Credit Counselor After Filing for Chapter 7 Bankruptcy

Speak to a Chapter 7 bankruptcy Lawyer Today

If you need help to file Chapter 7 bankruptcy but you’re concerned about being able to pay the associated fees, contact Groce & DeArmon, P.C., today. Our first consultation is always free. Please contact us today or call our office at 417-862-3706 or 1-800-640-3706.

What Sets Groce & DeArmon, P.C., Apart From Other Bankruptcy Attorneys in Springfield, MO?

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Serious millennial couple considering bankruptcy

At Groce & DeArmon, P.C., we believe in providing a client experience that connects us to our clients in a relatable, informative, and inclusive manner. We understand that bankruptcy is a process that can feel overwhelming and sometimes degrading. In today’s blog, we’ll explain how we separate ourselves from other law firms and bankruptcy attorneys by focusing on the client experience. 

Free Consultation

Before we accept your bankruptcy case, we review it to make sure you are paired with a legal attorney who has the appropriate knowledge and approach for you. We call this case review a consultation, and we never charge for this service. Everybody receives a free legal consultation when they first come to us for aid. 

Advocacy

Groce & DeArmon P.C. focuses on providing the support our clients need during stressful financial seasons. We work to provide friendly attorneys who understand the inner workings of the legal system, so they can assist our clients with navigating the legal system. You do not have to face bankruptcy alone. 

Related Post: 6 FAQs About Finding the Right Credit Counselor After Filing for Chapter 7 Bankruptcy

Knowledge Is Power

Our clients rely on the information we can provide in bankruptcy and credit counseling. We work hard to provide friendly, approachable attorneys that are knowledgeable about the legal system. We advise clients of the best way to handle their bankruptcy, explain vital legal terms to keep them informed and help them navigate the courts. We believe informed clients are liberated clients. 

Related Post: Top Reasons for Filing Bankruptcy Immediately

Additional Questions? Ask Groce & DeArmon, P.C. 

Need some compassionate and professional legal advice? Contact us today. We can discuss your options and help you determine the best course of action for your individual situation. Our first consultation is always free. Contact Groce & DeArmon, P.C. or call toll-free 1-800-640-3706 in Missouri or (417) 862-3706.

Do You Know How Liens in Missouri Can Affect You?

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LIEN in block letters

 

Did you recently find out that a lien has been placed on your property but you’re unsure what that means? In Missouri, there are several types of liens that an individual or business can place on someone who owes a debt. The more you understand what a lien is, and the type that has been placed against you, the better you can begin to eliminate it. Groce & DeArmon, P.C. explains.

Related Post: Top Reasons for Filing Bankruptcy Immediately

What Is a Lien? 

A lien is when a creditor files a legal right to a security interest in your property. 

When a person or business files a lien against you in Missouri, the lien holder (the creditor who has filed a lien against you), attempts to prevent you from selling the property until the debt has been paid in full to the lien holder. 

Are there good liens and bad liens?

Yes, there are three main types of liens in the United States. 

Statutory Liens. This is a lien against you that will adversely affect your credit for up to seven years. If you have defaulted on a loan or not paid for services rendered, then the creditor or provider can file a lien against you in court.

Consensual Liens. This is considered a good lien and happens when you purchase a vehicle, home or business assets. It is an agreement between you and the creditor that they will provide you a service or product and you, in turn, will pay the amount on the agreed terms. These types of Missouri liens do not affect your credit. 

Judgment Liens. These are the most severe liens. Like a statutory lien, these will remain on your credit for seven years. These liens happen when a court grants a financial interest in your assets to the creditor. Judgment liens are signed off on by a judge.

Related post: Preferential Debt Payment Options for Chpt. 7 Bankruptcy

What are the different types of liens? 

There are many liens in the State of Missouri, ranging from medical to mortgages. If a lien has been placed on you recently, or you need to file a lien on someone else, we offer a brief summary of the different liens available. 

Mechanic’s. Missouri law requests that any original contractor who provides labor, material or machinery for the improvement of property shall provide a notice to the owner of the property being improved. Missouri law requires this notice to be provided prior to receiving payment of any kind. If you had a mechanic work on your car or any motorized vehicle and you failed to pay for those repairs, that mechanic can place a lien on your property until he has been paid. 

Construction. If you hired a contractor to build a residential or commercial structure and did not pay for services rendered, they can place a construction lien against you. Adversely, if you as a contractor completed a building and now cannot get paid, you can file a lien against the owner. If this becomes a judgment lien, the judge will identify the borrower’s assets such as cars, real estate and equipment. The contractor (or lender) will notify the county clerk, the DMV and any banking institutions, preventing the business from selling the property without paying the lien first. This can be true for mechanic’s liens as well. 

Property & Real Estate. If you took a loan from a bank and used your property for collateral, and now you are defaulting on the bank loan, the mortgage company can place a lien on your home. If you were to sell the property, whatever you owed to the bank will be taken from the price of the sale for the price of the lien. Your lien will be removed. However, you will have less money in hand after the sale and it may affect your credit. 

Tax Lien. This happens when the government places a lien when income, estate or property taxes are owed but not paid. If you own taxes in the State of Missouri and have not paid them, there may be a lien against you. This Missouri lien is filed in court.

Related post: Wage Garnishment in the State of Missouri

How do I remove a lien from my record in Missouri?

Groce & DeArmon, P.C., offers several steps you can take to remove a Missouri lien from your record.

  • Pay it off directly. Work with the lienholder for a payment plan or pay in full as quickly as possible.
  • Make a payment plan with the Missouri Department of Revenue or IRS.
  • Fill out a Release-of-Lien form and have the lien holder sign it.
  • Run out the lien under the statute of limitations. Missouri has a 10-year statute of limitations to collect debt, including liens.

Questions About Missouri Liens? Ask Groce & DeArmon, P.C. 

If you have recently been notified that a lien has been placed against you, or if you need to place a lien on another party, contact us today. We can discuss your options and help you determine the best course of action for your individual situation. Our first consultation is always free. Contact Groce & DeArmon, P.C. or call toll-free 1-800-640-3706 in Missouri or (417) 862-3706.

6 FAQs About Finding the Right Credit Counselor After Filing for Chapter 7 Bankruptcy

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Couple Looking Sideways at Each Other During Counseling

You have filed for Chapter 7 bankruptcy. Your attorney says you are required to go through credit counseling. But how do you find a credit counseling agency? Do they have to be approved by the U.S. government? The bankruptcy experts at Groce & DeArmon. P.C. will guide you through these questions and more in today’s blog. 

Related Post: Common Questions About Chapter 7 Bankruptcy

1. Is Credit Counseling Required?

Yes. The government believes that by requiring you to go through counseling, it will help you understand the process and lasting impact of your financial decision to file for Chapter 7 bankruptcy, thereby reducing the risk of having to file ever again. But you may not understand that you will be required to complete two phases of counseling. 

The federal government requires that all persons filing for bankruptcy take credit counseling before filing. This will kick start the process. Then, a second phase of counseling will occur after you have filed. This is pre-discharge counseling before your debts are forgiven by the court.

2. What Is Pre-Filing Credit Counseling?

Before filing for Chapter 7, you have to complete pre-filing credit counseling. If you don’t, your case could be thrown out. 

Pre-filing counseling is a source of education and support. By going through this, it may become apparent that you have choices other than bankruptcy through debt management. This course will also give you a greater understanding of the advantages and disadvantages of filing for Chapter 7 bankruptcy. 

Once you have completed this counseling, you will be given a Certificate of Completion that is valid for 180 days. You will need to give this to your attorney to keep on file and present to the court.

Related Post: What to Expect Before Filing for Bankruptcy in Missouri

3. What Is Pre-Discharge Credit Counseling?

This counseling is the last step before the court finalizes your Chapter 7 bankruptcy and discharges your debts. Like the pre-filing classes, these sessions walk you through a more in-depth look at your credit scores, how to build a budget and stick to it, and how to manage money. This is designed to set you up for greater financial success, with the goal of avoiding Chapter 7 bankruptcy in the future.

Like pre-filing credit counseling, you will receive a certificate of completion at the end of the classes. This must be presented to the court before they will discharge your debts through bankruptcy. 

4. How Do I Find a Credit Counselor? 

You’re already overwhelmed with the bankruptcy process. Trying to find the right counselor should be one of the easiest steps to make. The USTP (United States Trustee Program) offers a list of approved agencies on its website to assist individuals in finding an agency. 

5. Does Credit Counseling Cost Money? 

Counseling classes can range anywhere from $15 to $50 a session. You may want to shop around to find the price that best fits your budget. If your attorney deems that this would cause continued financial hardship, these fees can be waived in some cases. Talk to your attorney for the best option for you. 

6. What’s Next? 

Once you have completed your counseling and your debts have been discharged, you can begin the process of rebuilding your credit. While the bankruptcy may remain on your credit for 10 years, you should still work to rebuild your credit any way you can. Ask your credit counselor or attorney for best practices. 

Related Post: Must You Go Through Credit Counseling Before Filing for Chapter 7 Bankruptcy?

Bankruptcy Attorneys at Groce & DeArmon, P.C. 

We understand that filing for Chapter 7 bankruptcy is a difficult decision. But bankruptcy doesn’t have to be the end. It can be a new beginning. Our first consultation is always free. Contact Groce & DeArmon, P.C., online or call toll-free 1-800-640-3706 in Missouri or (417) 862-3706 for more information on how we can help.

Can You Still Have a Bank Account With Chapter 7 Bankruptcy?

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Man’s hands holding a tablet while trying to open a bank account

Chapter 7 bankruptcy is never an easy thing to consider. You wonder what’s going to happen to your finances, your family, your job, and your bank accounts. In today’s blog from Groce & DeArmon, P.C., we discuss whether or not you can still have a bank account during Chapter 7 bankruptcy.

Related Post: Groce & DeArmon, P.C.: Advice for Avoiding Bankruptcy

Yes, You Can Keep Your Bank Accounts

Your bank won’t close your accounts just because you file for Chapter 7 bankruptcy. You’ll be able to keep those accounts open, so long as you don’t accrue negative balances for too long of a time. If your account has a negative balance due to fees or overdrawn checks, your bank may choose to close the account.

However, you might not be able to keep the money in your bank account after you file for Chapter 7 bankruptcy. Some states may protect some of your bank account’s assets as an exemption from bankruptcy. But Missouri isn’t one of those states.

Related Post: Bankruptcy Exemptions in Missouri

What Happens to Your Bank Account When You File for Chapter 7 Bankruptcy?

Some banks may choose to freeze your account as soon as they receive the bankruptcy notice. If you put money into that account as part of your income from a job, your bankruptcy attorney will notify the bankruptcy trustee overseeing your case. The trustee will then notify the bank to unfreeze the account so you can use the money to pay your basic bills.

Related Post: What Does a Trustee Do in Chapter 7 Bankruptcy?

Secured Loan Through a Savings Account

You may have taken out a loan that’s secured through a savings account at your bank. That asset will likely be frozen to pay for your debt during Chapter 7 bankruptcy proceedings. The attorneys at Groce & DeArmon, P.C., can examine your situation to determine if this is the case.

How Can You Protect Your Cash Assets in a Bank Account?

Keep your bank account balance low before, during, and after the bankruptcy. As long as you keep accurate records of your expenses, it shouldn’t trigger a red flag with the trustee. You can still use your bank account for managing your basic expenses, such as food, rent, utilities, gas, etc. We’ll outline that in an expense versus income sheet when we advise you on a Chapter 7 bankruptcy case.

Stopping automatic payments coming out of your account is a good idea. That way, you have better control over your financial situation during a bankruptcy.

Related Post: Groce & DeArmon Explains the Role of a Bankruptcy Attorney

Bankruptcy Attorneys at Groce & DeArmon, P.C. 

Filing for Chapter 7 bankruptcy protection isn’t just stressful. It can be confusing if you’re not familiar with this type of filing. Our attorneys can help you through this difficult decision. Contact Groce & DeArmon, P.C. online or call toll-free 1-800-640-3706 in Missouri or (417) 862-3706 to schedule a free consultation.

You’re Expecting an Income Tax Refund, But You’re Filing for Bankruptcy. Now What?

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Tax refund check with stack of American currency in front of it

Chapter 7 bankruptcy is a difficult decision to make for anyone. You want to keep as much of your assets as you can, but you don’t want to be saddled with debts for the rest of your life. What about your income tax refund? Can you keep it when you’re going through Chapter 7 bankruptcy? The bankruptcy attorneys at Groce & DeArmon, P.C., explain. 

Related Post: Common Questions About Chapter 7 Bankruptcy

Short Answer: It Depends

When you file for Chapter 7 bankruptcy compared to when you receive your income tax refund determines what happens to the refund. If you file for bankruptcy first and then file your taxes a few weeks later, your refund may go to pay some of your debts. If you wait to file for bankruptcy after you receive your income tax refund, you might have more options available to you.

Your Tax Refund Is Listed as an Asset

Your income tax refund is listed as an asset when it comes to Chapter 7 bankruptcy. If you’ve filed for bankruptcy protection and you haven’t received your refund yet, the trustee will note that on the record. The trustee likely (but not always) will use the refund to pay some of your creditors who have unsecured debts. These include credit cards, installment loans, and medical bills. 

What About Missouri’s Exemptions for Chapter 7 Bankruptcy?

In Missouri, there are exemptions for the assets a trustee can use to pay off your debts. An income tax refund or any assets in your bank accounts are not exempt from being taken in a bankruptcy case. 

Related Post: Bankruptcy Exemptions in Missouri

Receiving Your Refund Before Filing for Chapter 7 Bankruptcy

What happens if you receive your income tax refund before you file for Chapter 7 bankruptcy? You have some options.

If your bank account has garnishments on it due to unsecured debts, consider choosing a paper check to receive your income tax refund. Selecting a paper check delays the refund process by several weeks. However, your chances of keeping that money increases.

Use your income tax refund to help pay for the Chapter 7 bankruptcy. Here at Groce & DeArmon, we offer a free initial consultation in addition to installment plans to pay for the legal expenses of filing for bankruptcy. You may elect to use some or all of your income tax refund to pay for your bankruptcy. We’ll discuss this option with you before you decide to do that, because it may not be the best course of action.

Pay into some of the exempted assets for Missouri. It may benefit you to put more equity into your home, vehicle, or tools you need for your work so that you have a chance to keep that property after filing for Chapter 7 bankruptcy. 

Related Post: How to Recover After Filing for Chapter 7 Bankruptcy

Bankruptcy Attorneys at Groce & DeArmon, P.C. 

Everyone’s financial situation is unique. Our bankruptcy attorneys would need to examine your finances to determine the best course of action for you with regards to your income tax refund and Chapter 7 bankruptcy. Our first consultation is always free. Contact Groce & DeArmon, P.C., online or call toll-free 1-800-640-3706 in Missouri or (417) 862-3706.

Must You Go Through Credit Counseling Before Filing for Chapter 7 Bankruptcy?

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Words credit counseling placed over $100 bills

Chapter 7 bankruptcy gives you a fresh start with your finances. Yes, it’s stressful to consider bankruptcy as a solution. But the right bankruptcy attorney can make the process easier. In today’s blog from Groce & DeArmon, P.C., we look at whether or not you must go through credit counseling before filing for Chapter 7 bankruptcy.

Related Post: Debt Consolidation Versus Bankruptcy: Pros & Cons

Must You Go Through Credit Counseling First?

Yes. Congress passed sweeping changes to bankruptcy laws with the 2005 Bankruptcy Act. One of those changes included a requirement that all individuals must undergo credit counseling within six months before filing for bankruptcy relief, whether it’s for Chapter 7 or Chapter 13. After filing for bankruptcy, you must also complete a financial management course.

Where Can You Find a Credit Counseling Agency?

The U.S. Trustee Program maintains a list of approved credit counseling agencies for you to look over ahead of filing for Chapter 7 bankruptcy. Many of these agencies are nonprofit organizations, meaning they offer their services for free or at a reduced charge. In general, if your income is 150 percent of the poverty line or less, you are entitled to a fee waiver or fee reduction. 

Fees for Credit Counseling

Chapter 7 bankruptcy filers obtain a certificate of completion from a credit counseling agency. The agency often has a fee for issuing the certificate. Any agency you choose must reveal to you any fees for their services before you sign up for credit counseling.

Submit to the Court

Your certificate of completion goes to the court on the day you file for Chapter 7 or Chapter 13 bankruptcy. The certificate lets the trustee know that you completed the course and the bankruptcy can proceed as normal. Groce & DeArmon can help you decide which credit counseling agency is right for you. Many agencies offer online classes, while a few provide in-person counseling for filers.

Related Post: What to Expect Before Filing for Bankruptcy in Missouri

Bankruptcy Attorneys at Groce & DeArmon, P.C. 

The bankruptcy attorneys at Groce & DeArmon, P.C., offer a way to wipe the slate clean with Chapter 7 bankruptcy in Missouri. We’re here to help you through this difficult time. Contact Groce & DeArmon, P.C., or call toll-free 1-800-640-3706 in Missouri or (417) 862-3706 to schedule a free consultation about our services.

Groce & DeArmon, P.C., Explains a Statement of Intention in Chapter 7 Bankruptcy

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Old book with Bankruptcy Chapter 7 note written on it

Chapter 7 bankruptcy offers debt relief for Americans every year. It’s a legal way to discharge your debts, whether you have mounting medical bills, credit card debt, or you’re unemployed and can’t pay your mortgage. In today’s blog, Groce & DeArmon, P.C., explains what a statement of intention is and why you need one for Chapter 7 bankruptcy.

Related Post: What Not to Do Before Filing for Bankruptcy

Required Form

A statement of intention for Chapter 7 bankruptcy is a required form for all filers, whether you file as a single person or you’re married and file jointly. It’s known as Official Form 108: Statement of Intention for Individuals Filing Under Chapter 7.

What’s on the Statement of Intention Form?

The Statement of Intention form tells the court what property you intend to keep and what property you intend to surrender for a secured debt. Surrendering the property is a good option if you can’t afford to make the payments, the property is worth less than what you owe, or you don’t need the property.

Unexpired Leases

Statement of Intention forms address leased property, as well, such as leases for equipment or vehicles. These are for current leases only, not for expired ones. 

For instance, you lease a car from your local dealership. You’re one year into the two-year lease agreement. You can declare that you want to end the lease or want the trustee to assume the lease on your behalf in Chapter 7 bankruptcy. Leases do not apply to real estate, such as the home or apartment you rent as your primary residence.

How to Fill Out the Statement of Intention Form

The form has three parts. The first part declares secured property you own, the name of the creditor, what you plan to do with it, and if the property is exempt under Schedule C (which deals with business property).

The second part of the form lists any leases you have for property. Here is where you describe the property, who leased it to you, and whether the court trustee will assume the lease.

Part three is where you sign and date the form. The bankruptcy attorneys at Groce & DeArmon, P.C., can help you fill out the Statement of Intention form when we discuss bankruptcy proceedings with you.   

Related Post: Common Mistakes Made During Bankruptcy Protection Proceedings

Bankruptcy Attorneys at Groce & DeArmon, P.C. 

Chapter 7 bankruptcy provides a way for you to wipe the slate clean by discharging most or all of your debts. Our bankruptcy attorneys can help you through this difficult decision. Contact Groce & DeArmon, P.C., or call toll-free 1-800-640-3706 in Missouri or (417) 862-3706 to schedule a free consultation.