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Chapter 7 Bankruptcy FAQ

If you have amassed a significant amount of debt, yet have suddenly found yourself unable to keep up with your financial obligations, it may be time to consider seeking debt relief through bankruptcy. Chapter 7 bankruptcy can help eliminate unsecured debt and give you the clean slate you need to get a fresh financial start. To help you determine whether Chapter 7 may be right for you, we wanted to provide answers to some of the questions our legal team is most frequently asked.

What is Chapter 7?

Chapter 7 bankruptcy, also known as liquidation bankruptcy, is a legal process by which an individual can get the majority of his or her unsecured debt wiped out. In this type of bankruptcy, nonexempt assets are liquated to help get creditors paid off. The rest of an individual's qualifying debt will be discharged at the end of the bankruptcy process.

Is it hard to qualify for Chapter 7?

Those who want to file for Chapter 7 must first qualify by passing a means test. Is it not necessarily difficult to qualify for Chapter 7, however your income must be below the median income before the bankruptcy court will allow you to pursue this type of legal protection.

Can filing for Chapter 7 bankruptcy put an end to creditor harassment?

If you are being harassed by creditors as a result of you being unable to make timely payments and keep up with your financial obligations, filing for bankruptcy can help. As soon as you file for Chapter 7, an automatic stay will be issued preventing all creditors from continuing to pursue collection or legal action against you.

Can I eliminate all of my debt through Chapter 7?

The majority of all unsecured debt can be discharged through Chapter 7. As long as your debt was not incurred through fraudulent means, you should be able to get all outstanding, unsecured credit card debt, medical bills and personal loans discharged by filing for Chapter 7 bankruptcy.

What debt cannot be eliminated through Chapter 7?

There are certain types of debt which are not eligible for discharge through Chapter 7. Secured debt, or that debt for which you supplied some type of collateral, cannot be eliminated in Chapter 7. Child support payments, spousal support, most student loans, recent tax debt and other specific types of debt are all ineligible for discharge through Chapter 7.

Will I lose my house if I file for Chapter 7 bankruptcy?

The state allows an individual to claim certain exemptions when filing for bankruptcy which could make it possible for him or her to retain possession of the family home. Bankruptcy halts all legal actions including foreclosure proceedings. To find out whether your house could be lost in the bankruptcy process, it is advised you discuss your particular circumstances with an experienced bankruptcy lawyer before you proceed.

Even if you have tried to keep up with your financial obligations, not incur more debt than you can afford and not overextend your credit, you may still end up finding yourself on the brink of bankruptcy. The loss of a job, a divorce, medical bills, the failure of a business venture, an upside-down mortgage or any number of unexpended expenses could leave you with debt you are unable to pay.

At Dion R. Hancock, P.A., we provide our clients with sensible solutions to whatever debt problems they may face. We have years of bankruptcy experience and we take pride in helping our clients avail themselves of the benefits of bankruptcy. After close review of your finances we will be able to advise you as to whether Chapter 7 bankruptcy, or one of the various alternatives to bankruptcy, would be the most viable option to help you eliminate your unpaid debt and get back on the road to financial freedom.

Do you want to find out more about Chapter 7? Are you wondering whether Chapter 7 may be right for you? If so, we advise you contact our firm and schedule to meet with a St. Petersburg bankruptcy lawyer at your earliest convenience. The sooner you can, the sooner we can take action to help you get the debt relief you seek.

Categories: Bankruptcy

The information on this website is for general information purposes only. Nothing on this site should be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or viewing does not constitute, an attorney-client relationship.