Chapter 7

FREE YOURSELF FROM YOUR OVERWHELMING DEBTS.

You may assume the new bankruptcy law prohibits you from filing a Chapter 7 debt elimination. This is one of many bankruptcy myths and just is not true.

You can still eliminate or wipe out credit card debt, medical bills, judgments, stop garnishment and keep your personal property, home, and car as long as their values do not exceed the bankruptcy exemptions you are allowed to take.

The bankruptcy starts with the filing of a petition, schedules and statement of financial affairs with the bankruptcy court. In the bankruptcy schedules you must list all of your creditors, your property and your monthly income and expenses. The Chapter 7 court filing fee is $306. Prior to filing you must complete a court approved credit counseling course over the telephone, internet or in person. These counseling services charge minimal fees of $25-$75 depending upon which one you decide to use. They all count the same so you can use the cheapest. We will point let you know which ones are the cheapest.

As soon as the case is filed it creates an automatic stay. This means your creditors are prevented from contacting you in any way, whether by telephone, letter or any other means.

The next step is that you will have to attend what is called a 341 meeting with a trustee appointed by the bankruptcy court. Attorney Burr will attend that meeting with you and advise you of what to expect.

Then you will need to take a court approved financial management course. The process is similar to the credit counseling course you will take prior to filing. The charges are the same as the first course you took.

You will then receive a discharge that will wipe out your debts. There are some exceptions which include taxes owed to the IRS or state, student loans, alimony, maintenance or support payments, secured debts unless you surrender the collateral, OWI related debts, and fraud related debts.

You can only file a Chapter 7 once every 8 years.

If your last 6 months month income is greater than the median income for a family of your size and you do not pass the means test included in the bankruptcy schedules then you will have to file a Chapter 13 reorganization. Please see our Chapter 13 page.