Chapter 7 Bankruptcy
In a bankruptcy case under Chapter 7, you file a petition asking the court to discharge your debts. The basic idea in a Chapter 7 bankruptcy is to wipe out, or “discharge,” your debts. In rare instances, you will need to give up property except for “exempt” property which the law allows you to keep. In most cases, all of your property will be exempt. But property which is not exempt is sold (or replaced by cash from you, if you wish to keep it and have the money) with the money distributed to creditors.
If you want to keep property like a home or a car and are behind on the payments on a mortgage and the lender will not work with you, then a Chapter 7 case probably will not be the right choice for you. That is because Chapter 7 bankruptcy does not eliminate the right of mortgage holders or car loan creditors to take your property to cover your debt.
Chapter 7 will also not discharge the following kinds of debts:
- loans you got by knowingly giving false information to a creditor who reasonably relied on it when making you the loan.
- debts resulting from “willful and malicious” harm.
- marital property division obligations.
- income taxes that are more than three years old with no tax return filed.
If you have debts that cannot be discharged in a Chapter 7 bankruptcy, don’t worry - Chapter 13 bankruptcy may still be an option for you.
Confused? Don’t worry - one of the reasons you need to hire an experienced bankruptcy lawyer for your case is to be sure that you choose the right type of bankruptcy for your situation. All you need to do is contact me for a free, no-obligation consultation to talk about your problems and whether bankruptcy is right for you.
