Chapter 7 Overview
Starting the Process
A person must first make sure that they qualify before filing. A person will qualify for Chapter 7 relief if either: (1) their income does not exceed the median income level for the state in which they reside; or (2) if their income is over the state median, the “means test” is satisfied. (For more information on state specific median income visit www.justice.gov). In addition to the income requirement, before a person can file for bankruptcy, they must receive credit counseling from an agency approved by the United States Trustee’s office. (For a list of approved agencies, go to the Trustee’s website at www.usdoj.gov/ust).
Filing your Petition
Preparing a bankruptcy petition can be overwhelming and confusing and that is why we suggest that you let one of our experienced attorneys assist you with this process. There are a number of detailed rules and procedures that must be followed to ensure that your petition is filed correctly with the court.
Once a petition is properly filed, the court will appoint a trustee who will be assigned to your case to collect all “non-exempt property,” of which he or she will take these assets and distribute proceeds to appropriate creditors. This does not mean that a trustee will necessarily take all of your assets. And in fact, a person filing pursuant to chapter 7 may even qualify to reaffirm specific debts which would then be exempt from capture and repayment by the trustee. For instance, by signing a reaffirmation agreement a debtor can continue to pay for a car loan or a mortgage on their home.
Under Chapter 7, unlike other forms of bankruptcy filings the debtor does not make a payment to the trustee for his or her services. Also a filing debtor under Chapter 7 receives a discharge on all dischargeable debts. For further clarification on which debts are and are not dischargeable it is recommended that you seek the advice of one of our experienced bankruptcy attorneys.
If you are ready to find out if you qualify for Chapter 7 relief, begin by filing out our bankruptcy case review form and an attorney from our office will follow up on your eligibility within 24 hours.