Madisonville Chapter 7 Bankruptcy Lawyer
40 Years of Professional Legal Advocacy and Friendly Customer Experience
Chapter 7 is the most common form of bankruptcy filing in the United States, primarily because it is the fastest debt relief method. To find out more about Chapter 7 and how it may apply to your financial situation, please contact my office for an evaluation. I have been serving clients throughout Madisonville for 40 years, and I aim to provide the knowledgeable and friendly legal support you need in your time of need when facing bankruptcy issues.
What Is Chapter 7 Bankruptcy?
Chapter 7 bankruptcy is primarily filed by individuals who seek to clear their dischargeable debts as soon as possible. It is a liquidation type of filing, where a court-approved trustee will take over nonexempt assets (boats, timeshares, additional vehicles, etc.) and convert them to cash to pay creditors. In other situations, the individual may have a “no-asset” case if they do not have such items, in which case the debtor will receive a Chapter 7 discharge, usually within a few months after filing.
Individuals qualify for Chapter 7 if their gross income is lower than their state's median income. If it's higher, they may still qualify if they do not have significant debt left over to feasibly complete a Chapter 13 repayment plan after paying allowed monthly debts. Debtors typically cannot pursue Chapter 7 if they have already received a bankruptcy discharge in the last 6-8 years.
The Filing Process
The bankruptcy process begins after the debtor files a petition and other required forms with the bankruptcy court, including information regarding:
- their property;
- their current income and monthly living expenses;
- their debts;
- property necessary to maintain a basic standard of living ("exempt property"), such as some equity in the home, clothing, furniture, Social Security payments, necessities such as a car;
- property they owned and money they spent during the previous 2 years; and
- property they sold or gave away during the previous 2 years.
Note that filing for Chapter 7 puts into effect an "automatic stay," which prohibits most creditors from attempting to collect from the debtor. As a result, for a temporary period, creditors cannot legally garnish the debtor’s wages, empty their bank account, seize their car, house, or other property, or cut off their utility service.
In the Chapter 7 process, the debtor essentially places their property and debts in the hands of the bankruptcy court; they cannot sell or give away any of the property without the court's consent. As mentioned earlier, the court will appoint a bankruptcy trustee who will oversee the entire bankruptcy process, particularly reviewing the debtor’s assets and determining which will be liquidated to pay creditors. The trustee will also participate in a “meeting of creditors,” where the relevant creditors may pose questions to the debtor and their trustee. As a result, the trustee is a very critical individual in a bankruptcy proceeding who will have significant oversight on the process.
Most debts are discharged under a Chapter 7 bankruptcy, which means the debtor will be released from any personal liability for payments. So, most debts will be wiped out by the court, except for the following:
- debts that automatically survive bankruptcy, such as child support, tax debts, and student loans (unless the court rules otherwise); and
- debts that the court has declared non-dischargeable because the creditor objected (e.g., debts incurred by fraud or malicious acts).
Give Me 2 Minutes and I’ll Tell You What I Can Do For You
As a Madisonville Chapter 7 bankruptcy lawyer with 40 years of professional experience, I can help you navigate your Chapter 7 bankruptcy filing from beginning to end. Whether you have questions about your eligibility under the “means testing” system for calculating your disposable income or seek legal guidance in the liquidation of your assets with a trustee, my firm can help. I can review your debts with you to establish what can potentially be discharged in a Chapter 7 filing. Put your best foot forward in your bankruptcy filing with my firm today.