Chapter 7 Bankruptcy Information
Chapter 7 bankruptcy is a legal filing done when a person has too much debt and can't afford to pay off their creditors in a reasonable time period. Under bankruptcy protection, people that own money to creditors seek relief by filing for chapter 7 bankruptcy. Not all debt can be discharged in a chapter 7 bankruptcy. Student loans and income taxes owed to the government will still need to be paid, but all unsecured debt such as credit card debt will not have to be paid back.
Chapter 7 allows people to get back on their feet financially and protects consumers who have gone overboard with their spending habits in the past. People who file chapter 7 bankruptcy will see their credit score go down temporarily, as their creditors file claims with all the major credit bureaus.
Both Chapter 7 bankruptcy and Chapter 13 bankruptcy provide powerful tools for people who are overwhelmed by debt. However, neither type of bankruptcy is a magical solution that puts an instant end to a debtor’s financial problems. In a typical Chapter 7 bankruptcy case, it takes about 4 to 6 months to receive a discharge. A Chapter 13 case is built around a repayment plan that lasts from three to five years. On first hearing, those time frames can be discouraging to people struggling with past-due bills. Many people don’t take the first steps toward bankruptcy until the situation is…Read More
Technically, any individual can file for Chapter 7 bankruptcy unless the debtor, in the preceding 180 days, either: Had a bankruptcy petition dismissed because he or she willfully failed to appear in court or to comply with orders of the court, or Voluntarily dismissed a bankruptcy case after secured creditors sought leave of the court to recover collateral A bankruptcy filing will also typically be dismissed if the debtor has not completed the required credit counseling in advance of filing and submitted a certificate of completion with the bankruptcy petition. Of course, when people ask whether they can file Chapter…Read More
One of the most common concerns my clients have is whether or not filing a bankruptcy case will affect their job. The short answer is this; no, filing a case should not have any impact. The Bankruptcy Code at 11 U.S.C. §525 specifically prohibits employers from discriminating against any person who has filed for bankruptcy relief. Your employer would be breaking a federal law if they fire you or discriminate against you as a result of your bankruptcy. Protection Against Discriminatory Treatment (a) Except as provided in the Perishable Agricultural Commodities Act, 1930, the Packers and Stockyards Act, 1921, and…Read More
There are four costs to consider when filing for bankruptcy. The four fees are credit counseling/personal financial management fees, filing fee, attorney’s fee and the trustee’s fee for administrating your case. Credit Counseling/Personal Financial Management Fees There are two counseling courses that must be completed with every bankruptcy. A credit counseling course must be completed before you file bankruptcy. When you complete this credit counseling a certificate will be filed with your bankruptcy petition proving you completed the course. This course focuses on your current finances and spending. The second course, personal financial management must be completed after you file…Read More
You might have heard about the doomed Fyre Fest that took place in early 2017. The music festival was promoted by models and celebrities like Kendall Jenner and Bella Hadid. These celebrities were paid by the festival promoters to promote it on their social media. What Went Wrong at Fyre Fest? Around 5000 people purchased tickets to Fyre Fest, expecting a fun two weekends of music and fun. Festival-goers were promised a luxurious music festival in the Bahamas and instead were welcomed to a disaster. The only musical act to perform was a group of local musicians on the night…Read More
Yes, in some circumstances, filing either a chapter 7 or chapter 13 bankruptcy will allow you to get your suspended driver’s license reinstated. The Domino Effect of a Suspended License Even though it is a requirement in many states to carry a bare minimum of liability insurance, unfortunately, many folks are just simply unable to afford to do so. Many times, this results in an uninsured auto accident. If the uninsured driver is at fault and unable to pay for the damage to the other party, it can result in several bad things to include a lawsuit, judgments and even…Read More
What is a Statement of Financial Affairs? Sounds pretty simple and harmless, right? Actually, it can be very detailed and complicated. If you have filed a Chapter 13 or Chapter 7 Bankruptcy, you have had to complete a Statement of Financial Affairs for Individuals Filing for Bankruptcy and, most likely, your attorney has stressed the importance of accurately answering all of the questions asked on the Statement of financial affairs. What Does This Statement Consist Of? The statement consists of only twenty eight yes or no questions. A “yes” answer requires elaboration. Therefore, this can be one of the most…Read More
When someone files chapter 7 bankruptcy and owes money on a secured debt (i.e., car note, furniture loan), they must make a decision by stating their intentions on what they want to do with the collateral securing those type loans. The options to choose from are: Reaffirm the debt and keep the collateral To reaffirm a debt, one must sign a reaffirmation agreement, a contract, agreeing to pay the debt back at the terms outlined within the reaffirmation agreement. The reaffirmation agreement is filed in your bankruptcy case to let the court know that you intend keep the property and…Read More
The bankruptcy code defines an insider as either a relative, a relative of a general partner, a general partner of the person filing bankruptcy or a corporation in which the person filing bankruptcy is an officer, director or personal in control. When filing bankruptcy you must answer whether you have made a payment on any debt owed to an insider within the last 12 months of filing bankruptcy. The trustee will ask you this question, under oath, at your 341 hearing. Why does the trustee care whether I have repaid an insider money within the last year? The bankruptcy code…Read More
Todd Chrisley, the star of Chrisley Knows Best filed a chapter 7 bankruptcy in August 2012. The Chapter 7 Trustee who administered Chrisley’s bankruptcy estate filed an adversary proceeding in February 2014 asserting Chrisley had not disclosed all of his assets and transferred assets to his wife prior to the filing of the bankruptcy. [i] The Trustee sought to avoid those transfers as a fraudulent transfer. Subsequently, the Trustee and Chrisley entered a settlement agreement whereby Chrisley was to pay the bankruptcy estate $150,000. This settlement was approved by the Bankruptcy Court in March 2015. Motion for Contempt In January…Read More