Chapter 7 Bankruptcy

 

Chapter 7 is the most common form of bankruptcy. It is used most often by individual debtors who are unable to meet their bills and need fresh start. It may also be used by businesses that wish to liquidate and terminate their business.

Many people think that they can no longer file for Chapter 7 Bankruptcy because bankruptcy laws changed in 2005. That is not true. Although the new law has made the process a bit more complicated, most debtors can still eliminate debts and get a fresh start through Chapter 7 Bankruptcy. In most case you can keep your personal property, and in many cases you may even keep your home or car by reaffirming the loan.

Debts You May Eliminate Under Chapter 7:
With a few exceptions, Chapter 7 eliminates:

  • Credit card debts
  • Medical bills
  • Lawsuit debts/civil judgments (including personal injury)
  • Personal loans
  • Some taxes
  • Deficiency debts on foreclosures and repossessed vehicles

There are some debts that may not be discharged, such as student loans (unless there is undue hardship), alimony and child support, damages for personal injury to someone else resulting from DUI, criminal fines and restitution, court fees, and certain taxes.

Property You Can Keep Under Chapter 7:

With some limitations, certain items of personal property are exempt, meaning the debtor can keep them. Exempt property can include:

  • Motor vehicles (up to a certain value)
  • Reasonably necessary clothing
  • Reasonably necessary household goods and furnishings
  • Household appliances
  • Jewelry (up to a certain value)
  • Pensions, including money in 401k plans
  • Equity in the debtor's home (up to a limit)
  • Tools of the debtor's trade or profession (up to a certain value)
  • A portion of unpaid but earned wages
  • Public benefits, including public assistance (welfare), Social Security, and unemployment compensation, accumulated in a bank account
  • Damages awarded for personal injury.
If you have questions about Chapter 7 Bankruptcy, please give us a call.

For a free debt consultation, call us anytime at 215-392-0572
(toll-free at 888-394-8318) or use the form above to send us an email.