An overview on what to expect if you are considering a chapter 7 bankruptcy including what assets can be taken and what assets can't be taken as well as what debts can and can not be discharged.
The decision to declare bankruptcy is never an easy one to come to but if you are afraid to open your mail or answer your phone because you don’t want to be reminded of the bills you can’t pay and you are tired of dealing with the constant on slaughter of bill collectors it may be time to look at bankruptcy as a long term solution to give you some debt relief.
A chapter 7 bankruptcy lawyer can help walk you through the process,
file the paperwork in federal court on your behalf and answer your questions as well as address your concerns before you file.
The most common questions clients have when considering bankruptcy involve what debts can be discharged and what type of assets can be lost. Your chapter 7 bankruptcy lawyer can explain things in more depth but generally the types of debts that can not be discharged include alimony, child support, IRS debts, and student loans. If this is the burden of most of your debt filing for bankruptcy may not be the solution for you.
Other concerns you may have to address with your chapter 7 bankruptcy lawyer include the all important asset test. The courts will contend that you are allowed to keep certain assets but others must be sold and the monies used to repay what can be repaid of your debts. Sometimes this is nothing; sometimes it is just pennies on the dollar. Property that is not exempt from being sold off includes a second home, a second vehicle, musical instruments, (unless you are a professional musician), collections, family heirlooms, stocks, bonds, cash or other investments.
Property that can not be taken includes your primary home (unless it is in foreclosure, in which case a bankruptcy can not save it), your only vehicle up to a certain amount, household goods and appliances, clothing, tools required for your job and your pension. The list is quite extensive and is something your chapter 7 bankruptcy lawyer can go over with your to see if you own any property that will need to be sold.
Once you make the decision to file bankruptcy you can let any debt collectors or creditors know you will be filing bankruptcy. They may continue to contact you until you actually file but most creditors back off the minute they hear you are filing due to strict laws regulation their contact with you once the B word is mentioned.
Your chapter 7 bankruptcy lawyer will contact all of your creditors and inform them of the court date and time for your hearing. Any of them or none of them may show up at the hearing to argue against the discharge of the debt. Normally few if any bother to show and the discharge process begins.
The court will go over the paperwork your lawyer filed listing your debts and your assets and they may ask you a few clarifying questions. Once the matter is deemed acceptable your discharge will be granted and your debts will be considered discharged by the court.
