Chapter 7 Bankruptcy
Chapter 7 Bankruptcy, aka ‘clean slate,’ ‘liquidation,’ or ‘fresh start’ bankruptcy, is the number one way to eliminate your debts and regain control over your finances.
Chapter 7 Bankruptcy can assist with the following:
- Credit Card Debt
- Medical Bills
- Payday Loans
- Lawsuits
- Judgments
- Unpaid Balances
- Repossessions
- Foreclosures
- Personal Loans
- Guarantees
In most cases, a Chapter 7 bankruptcy case can be completed in just three to four months.
Once the Bankruptcy Trustee reviews all your paperwork during the ‘meeting of creditors’ that you will attend with your Rocklin bankruptcy lawyer, the process will move very quickly. Most people who file for Chapter 7 bankruptcy are able to wipe out all of their debts and keep all of their property.
Who Can File For Chapter 7 Bankruptcy?
Many people who have an overwhelming amount of debt file for Chapter 7 because they want to get a fresh start by eliminating all the debts they can’t afford to pay. In addition, they want to start rebuilding their credit and take control of their financial situation.
However, there are some limitations regarding who can file for Chapter 7 Bankruptcy.
For example, if you previously filed and received a discharge for Chapter 13 bankruptcy, you will need to wait six years from the filing date of your Chapter 13 case before you can file for Chapter 7.
Every situation is different, and circumstances can be complicated. But don’t worry; we can help determine if you qualify for Chapter 7 relief.
If Chapter 7 is unavailable for you, there may still be some options with Chapter 13, depending on your current financial situation, including a repayment plan to restructure your debts and remove some of the financial restraints.
Are you looking for an experienced Bankruptcy Attorney?
Our Chapter 7 Bankruptcy Attorneys in Rocklin will Discharge Your Debts and Put You in Control of Your Financial Future!
Chapter 7 is the most common type of bankruptcy filed and can typically eliminate all of your debts. In addition, if your case is handled by one of our bankruptcy experts, it can usually be an easy and fast process.
Many people wait too long to get started and are faced with additional issues, delays, lost property, and failure to secure the relief they need. Don’t let this happen to you.
Can Chapter 7 Immediately Stop Creditors?
The Chapter 7 bankruptcy petition will invoke an ‘automatic stay’ that will immediately stop most creditor collections, wage garnishments, foreclosures, repossessions, lawsuits, bank levies, and other lien enforcement actions.
It can also prevent the cut-off of welfare benefits and utility services. Once your creditors have been informed of your bankruptcy file, they must adhere to the law or suffer consequences.
You do not need to do anything to get this automatic stay.
If there are any exceptions to your ‘automatic stay,’ your bankruptcy attorney will inform you.
This can include things such as:
- Child Custody
- Support Hearings
- Divorce Judgments
- Other Parenting Issues
These types of situations will continue via state courts regardless of your bankruptcy filing. In some instances, banks and lenders will ask the court for a ‘lift’ on the automatic stay for home mortgages or car liens.
In any case, the Chapter 7 Bankruptcy automatic stay relief will provide you with the time needed to regroup and decide whether or not to keep or let go of any assets with liens. It will also delay the foreclosure and repossession processes for a specific amount of time.
What Is the Means Test?
Chapter 7 Bankruptcies have an eligibility requirement known as the ‘Means Test,’ which makes bankruptcy more complicated for higher-income brackets to file.
This requirement was added to the Bankruptcy Code in the 2005 amendments to the law called the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (“BAPCPA”).
However, the Means Test will only apply if your income during the six months before you file for Chapter 7 is higher than the established medium averages in your region.
If the results from the Means Test show that you have a significant net income available to pay your creditors, you may not be eligible to file for Chapter 7 but instead choose another option, such as Chapter 13.
There are complicated formulas used to figure out your net income, and if you fall below the threshold amounts, you may still qualify for Chapter 7. It’s best to speak with an experienced bankruptcy attorney in Rocklin to see where your net income falls if you believe you are in a high-income bracket.
Remember, the Means Test only looks at your past six months of income, so it’s crucial to evaluate your current financial situation and see when the best time is to file for Chapter 7 Bankruptcy.
