What is Chapter 7 Bankruptcy?

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Many people struggle through difficult financial times in their life. In fact, often times a person filing for bankruptcy is a middle-class citizen with a job, house, and children. These times can often be stressful, as an individual may face the possibility of not being able to support their family or losing their home. It is important to know that in these situations, there are options available to help people get back on their feet.

When a person finds themselves struggling financially, they can file for bankruptcy. During this time, it is important to seek out an experienced bankruptcy attorney that can assist you during this process. This is because there are different types of bankruptcy an individual may file for, including Chapter 7 bankruptcy. In order to do so, they must qualify. An attorney can help the individual figure out the best solution to their personal situation.

Chapter 7 Bankruptcy

When a person is looking to file for bankruptcy, they may be eligible to file for Chapter 7. With this type of bankruptcy, certain assets of the individual may not be seized and they can keep them. This can include bank accounts, automobile, pension plans, IRA’s, and their house. Chapter 7 bankruptcy also allows an individual to discharge the majority of their debts. This can include credit card debt, personal debt, medical bills, foreclosures, and automobile repossessions. However, there are certain debts that cannot be eliminated. This can include student loans, recent income taxes, alimony, child support, restitution or compensation ordered by a Criminal Court, civil judgments, and any debts incurred by fraud.

Am I Eligible?

In order to file for bankruptcy, an individual has to meet certain requirements depending on the type they wish to file for. For Chapter 7 bankruptcy, an applicant must meet the criteria. When a person wants to file for Chapter 7 bankruptcy, they must have a family income less than the average family income of the county in which they live. It is important to know that the average family income changes roughly every three months by the United States government.

The Automatic Stay

When a person files for bankruptcy, the Bankruptcy Court enforces the “Automatic Stay.” This is a system that allows a debtor some relief as they begin to make their bankruptcy plan and pay back their debts. The automatic stay prohibits creditors from participating in collection activities. This includes lawsuits, collection calls/letters, bank restraints, foreclosures, or repossessions. With this comes certain privileges that assist the debtor. This can include:

  • It is filed immediately
  • Collectors cannot pursue debts
  • It prevents harassment
  • It gives debtors breathing room to recover their financial state

Contact our Firm

If you or a family member is considering filing for bankruptcy and need the help of a skilled attorney, contact the Law Offices of Allen A. Kobler, Esq. today.

If you require the services of an experienced Business Law or Bankruptcy attorney, contact the Law Offices of Allen A. Kolber, Esq. today to schedule a consultation and discuss your options.