Chapter 7 Bankruptcy

Chapter 7 bankruptcy is the bankruptcy that most people think of when they file bankruptcy. It is not too dramatically different than that episode of The Office where Steve Carell “Declares Bankruptcy” by shouting it.

Obviously, it’s not quite that simple to file Chapter 7, but it is the most efficient and straight forward of the bankruptcies to accomplish. It is also the bankruptcy we recommend to our clients unless they cannot file Chapter 7 due to filing too recently, or there are compelling reasons to file another type of bankruptcy.

Qualifying for Chapter 7

As you may have noticed above, there are requirements that need to be met in order to file for Chapter 7. One of the biggest is qualifying based on your median income. If you can’t qualify based on that, by passing the means test. There is a more in-depth look at that in our page on the means test.

What Can Chapter 7 Do?

Chapter 7 is primarily designed to deal with unsecured creditors. An unsecured creditor is something like a credit card or a personal loan. This could also be a lawsuit or some other thing like that.

Loans on things like your car or your home are typically secured debts. Chapter 7 is not great for dealing with these types of debts unless you are looking to surrender those secured items and walk away without any debt.

Once you have determined your unsecured debts and the secured debts you are trying to get rid of, then you can file bankruptcy on those debts and they will be discharged. This means they cannot come collect those debts from your ever again. They cannot sue you and cannot attempt any type of collection efforts.

What Can Chapter 7 No Do?

Chapter 7 cannot help you catch up on your home. It cannot repay your taxes, or lower your car payment. These are things that you are able to do by filing Chapter 13. If you are interested in learning more about dealing with these types of debts, please check out our page on Chapter 13 Bankruptcy.

If you think Chapter 7 is right for you, please let us know by calling the number above or by scheduling a free consultation. Thank you for your time.