Chapter 7 Bankruptcy Attorney Seeing More Business

For a Chapter 7 bankruptcy attorney, the state of the American economy is bringing in more clients. As people all over the country continue losing jobs and struggle to pay their bills, bankruptcy is becoming their only option. This economic recession is unlike anything that some younger people have ever seen. The older generation may liken it to the Great Depression, but for those who were not alive yet then, this is new territory. Even college graduates are having difficulties finding and keeping employment. When people decide to file for bankruptcy, Chapter 7 is one of the most common types.

Even in the last year, bankruptcy filings have risen 2.6 percent, and there were already over one and a half million in 2010. This rise is much smaller than the nearly 14 percent rise from 2009 to 2010, but it is still moving in the wrong direction. It seems that the many people claiming the economy is improving are not considering the number of individuals in a financial crisis who are giving up.

According to some experts, bankruptcy filings will probably continue to increase as more people try to find solutions to their money problems. Some of the most common reasons people are filing bankruptcy include credit card debt, home loan default and foreclosure, and car loan default. When choosing to file, the type of debt and how large often determines which Chapter is the right one.

A Chapter 7 bankruptcy attorney handles those filings in which a person's assets are liquidated to resolve his or her debts. Some assets are exempt, such as a house or vehicle, but specific exemptions vary by state. The goal of the Bankruptcy Code is to allow people to regain a fresh financial start, not to punish them by making them forfeit all of their belongings. In many cases, the person filing is living with extremely limited assets to begin with, and if the value of those assets does not exceed his or her amount of debt, they are not usually subject to liquidation.

As soon as a person has filed a Chapter 7 petition with the court, creditors must cease any attempts to collect the debt owed. The court notifies those creditors, and they are prohibited from making phone calls, sending collection mailings, filing lawsuits, or pursuing an ongoing lawsuit against the debtor. In addition, no property can be repossessed or foreclosed, wages cannot be garnished, and the debtor cannot be evicted from his or her home. This "automatic stay" continues throughout the bankruptcy filing process. The stay is only lifted if the creditor files a motion with the court showing a reason that it should be lifted, and the court grants the creditor’s motion.

Not all types of debt are dischargeable under Chapter 7 filings. However, some of the most common types, like credit card and loan debt, are discharged. Student loans are not dischargeable in most cases, and neither is tax debt, alimony, or child support. The Chapter 7 bankruptcy attorney discusses all debts with his or her client to ensure all dischargeable debts are included in the bankruptcy petition. Anything that is left out cannot be discharged.

The decision to file bankruptcy is never easy, and an experienced Chapter 7 bankruptcy attorney provides much needed expertise throughout the process.