If you are buried in debt and feel like you will never be able to crawl out of the hole, bankruptcy may be the answer. At Bond & Botes, we can help. We understand that there is no one-size-fits all approach to bankruptcy. There are different laws depending on your personal financial situation and whether you want to be free of all debt or reorganize it so you can pay off some of it over a period of years. Chapter 7 bankruptcy is the approach that will free you of your debt. Our attorneys have years of experience guiding clients through financial difficulties, and we can help you decide if Chapter 7 is right for you.
Chapter 7 Bankruptcy Overview
Chapter 7 bankruptcy is designed to give debtors a “fresh start” in their financial life. At the end of the process, all qualifying debts are discharged, which means you will never have to pay them. Filing a bankruptcy petition is complicated and time consuming and not all debts are dischargeable. An attorney can help you make important decisions prior to filing your bankruptcy petition.
How a Chapter 7 Bankruptcy Attorney Can Help
Here are just a few things our experienced bankruptcy attorneys will do to help you. First, prior to filing your bankruptcy petition, we will:
- Review your entire financial situation to determine if bankruptcy is in your best interest and if you have the type of debt that will be discharged.
- Choose the right bankruptcy process that will work best for you.
- Prepare your petition. Each court has different requirements about what documents need to be filed. In addition to the petition, “schedules” must be attached to your petition. If you inadvertently leave a debt off your petition, you may still end up owing it at the close of the proceeding and it will not be discharged.
We will attend meetings called by the trustee and assist you throughout the proceedings. Bankruptcy experts say that those who go through bankruptcy with the assistance of an attorney have more of their debt discharged and are able to keep more of their assets.
Do You Qualify for Chapter 7 Bankruptcy?
Each state has what is called a “means test” to determine if you qualify for Chapter 7 bankruptcy. This means your income must be lower than the median income for your state. If your income is too high, you generally do not qualify. A bankruptcy attorney will evaluate your income and your expenses of daily living. If your expenses are very high, you may still qualify even if your income is too great. Many of our attorneys at Bond & Botes have been practicing bankruptcy law since before the means test was invented. We have years of experience to help you make sense of this complicated area of the law.
What Happens When You File Your Bankruptcy Petition
When you file your bankruptcy petition with the court, you are given a case number. At that time, all creditors must cease collection action. If you receive a collection call, tell the creditor that you have filed for bankruptcy, and tell them that if they have any questions to call your attorney at Bond & Botes. We deal with creditor and collection calls so you don’t have to. Once your case is filed it is illegal for creditors to contact you and make any other collection attempts during the course of the bankruptcy proceedings.
Will You Lose Your Property?
When you file your petition and receive your case number, a bankruptcy trustee is assigned to your case. The trustee reviews your financial status and, while in theory, the law requires you to give up your assets to the trustee who then sells them to pay your creditors, each state has its own laws regarding which property is exempt from taking by the trustee. This means you get to keep it. In general, you should be able to keep:
- Equity in your house up to a certain amount, which you may be able to keep.
- Equity in your car, which means you may be able to keep it.
- Ordinary household goods and personal property.
At Bond & Botes, we stay up to date on all the developments and changes in state and federal exemption laws in order to keep your hard-earned assets safe. When you consult with one of our attorneys, we’ll make sure you understand all the risks and benefits of filing a bankruptcy case.
Types of Debt That Will Be Discharged
Not all debt is discharged in a Chapter 7 bankruptcy. Debts that can be discharged include:
- Any unsecured debt including personal loans to friends.
- Credit card debt.
- Medical bills.
- Past due rent.
- Past due utility bills
- Income taxes that are more than three years old.
If the majority of your debt falls into any one of these categories, Chapter 7 bankruptcy will provide you the fresh start you need, and you will be relieved of these debts.
Debts That Will Not Be Discharged
If you have any of the following type of debt, Chapter 7 may not be the proper bankruptcy proceeding for you since these debts will not be discharged. That means you will still owe them at the end of the bankruptcy process.
- Outstanding child support or alimony.
- Any debt you owe that was imposed by a court because you broke the law.
- Student loans: the law is changing on this rule, but as it stands now, you have to show that repaying your loans would be an “extreme hardship.” This is a difficult thing to do and student loans are rarely discharged in bankruptcy proceedings.
If you’re having financial problems as a result of one of these debts, don’t let that stop you from considering bankruptcy! At Bond & Botes, you will meet with an attorney who can help you examine all your options on the path to financial recovery.
Contact us at the Bond & Botes law offices. We offer a free initial consultation with an experienced lawyer who keeps up to date on federal and state bankruptcy laws. The attorney will review your financial situation and determine if Chapter 7 bankruptcy is the right approach for you.