Chapter 7 Bankruptcy
Chapter 7 bankruptcy is truly a “fresh start.” It’s a complete liquidation of outstanding debt and prevents bill collectors from contacting you.
However, there are some intricacies that require meaningful consideration, so it’s critical to review everything with a highly experienced bankruptcy lawyer before moving forward on a court motion.
All candidates filing for Chapter 7 bankruptcy will have their financial statements reviewed thoroughly by the court.
There are a number of documents that may influence the decision: assets and liabilities, current income and expenditures, statement of financial affairs, executor contracts and unexpired leases.
The judge overseeing your case will make a final decision regarding the next steps in the qualification process.
Exempt vs Non-Exempt
If you qualify for Chapter 7 under the bankruptcy Means Test, the court will divide your financial assets into “exempt” and “non-exempt” categories.
This will determine what items you’re allowed to keep and those that will be auctioned through an estate sale.
Most courts allow you to retain items they deem a necessity to life, such as a home or vehicle.
The 2 lists below help explain which debts fall into Chapter 7 bankruptcy exemptions & non-exemptions:
Exempt Debts – Discharged:
- Credit Card Bills
- Medical Bills
- Utility Bills
- Past Judgments
- Personal Loans
- Certain Income Taxes
- & More
Non-Exempt Debts – NOT Discharged:
- Student Loans (generally)
- Child Support
- Certain Income Taxes
- Fines or Municipal Tickets
- Personal Injury Caused by Drunk Driving Accident(s) or Damage Caused by Other Intentional Acts
A Chapter 7 filing can also prevent utility shutoffs, wage garnishments, lawsuits and harassing debt collection phone calls.
Most of the time, you can keep your home, car, household goods, 401(k) and pensions.
If you file under Chapter 7, you can emerge from bankruptcy with a fresh start.
Now that you have a better understanding of Chapter 7 bankruptcy, you need to find out if you’ll qualify in your current situation, or if you’ll need to file for Chapter 13 bankuptcy.
Wisconsin residents may qualify for bankruptcy alternative, Chapter 128.
Our dedicated, compassionate and experienced lawyers will work with you to determine the best debt relief path for you.
Since you can only file for Chapter 7 bankruptcy every 8 years, it’s extremely important to make sure the right bankruptcy law firm is handling your case. Credit counseling is also recommended in order to avoid future bankruptcy filings.
At Credit Solutions, we take care of you from the moment you file until your case is closed. For personal debt, the process usually takes about 3 months.
Credit Solutions has conveniently located offices in Chicago and Milwaukee. We serve residents in Northern Illinois, Southeastern Wisconsin & beyond.
Schedule your FREE bankruptcy consultation today to see if filing for Chapter 7 bankruptcy is the right debt relief option for you.