Chapter 7 Bankruptcy Overview

Chapter 7 Lawyer

The Bankruptcy laws were created to offer people the opportunity to rebuild their financial future with a fresh start.  Chapter 7 filings make up approximately 70 percent of non-business bankruptcy cases. Under Chapter 7, debts are discharged, although some assets may be sold by a court-appointed trustee.  The proceeds from the sale of such property is paid to the trustee to cover administrative fees and repay creditors. Debtors must meet certain criteria in order to file bankruptcy under Chapter 7.

Prior to filing, debtors must participate in a credit counseling consultation with an approved agency.  We can help you with this credit counseling requirement for your convenience.  This on-line service will explain your alternatives to bankruptcy, how to do a budget analysis and general financial management.

A Chapter 7 bankruptcy provides a means to eliminate unsecured debt.  An unsecured debt is generally debt that without collateral attached to it.  In some circumstances, the debtor may have to liquidate/sale some of his or her assets for payment to creditors. This can include the sale of real estate.  We will examine your financial situation and consult on whether or not bankruptcy is the correct solution for you and whether a Chapter 13 or Chapter 7 bankruptcy is the best option.  For example, if you have a lot of non-dischargeable debts, it may be better to file a Chapter 13.

Debt that can be discharged includes the following:

  • Personal Loans
  • Credit Cards
  • Medical Bills
  • Taxes (Only in specific situations)
  • Utility Bills

Not all your debts can be eliminated in discharge, for example you will still be liable for: 1) child support; 2) some taxes; 3) student loans.  If you want that discharge, you have to obey the rules, including not doing the following: a) Try to hide/conceal your property; b) violate a court order; c) destroy financial records; d) make large charges on your credit cards.

After we have been retained, we will begin the process of filing a bankruptcy petition with the court. Upon filing of bankruptcy, you will experience the benefits of bankruptcy, including the automatic stay that exists to stop creditors from pursuing you.  The automatic stay is designed to stop most phone calls from creditors; protect much of your property from seizure; prevent foreclosure of your home; stop wage garnishments; stop the repossession of your vehicle.

Contact Bowman Law Firm in Huntsville, Alabama at 256.539.9850.