Chapter 7 Bankruptcy Laws

Chapter 7 is known widely as “liquidation” or “straight bankruptcy”. When you file for bankruptcy, an “automatic stay” goes into effect immediately. The automatic stay stops creditors from doing anything to collect the debts you owe them (unless the bankruptcy court allows otherwise). It will allow you to clear most of your outstanding debts quickly and regain financial control.

To qualify for a Chapter 7 bankruptcy you must make less than the median income for people in your area. If your income is above the median income level in your area, you may still be eligible for Chapter 7 protections, but you will have to undergo a means test to determine how much disposable income you have.

Some debts are not eligible for discharge in bankruptcy. Child support payments, student loans and most tax debt will not be discharged in bankruptcy.

The following debts are non-dischargeable in Chapter 7.

• Student Loans

• Child Support

• Debts for personal injury or death caused by you driving while intoxicated

• Tax debt (tax debt is very technical, and will require a consultation with a professional)

In addition to eliminating your debt, Chapter 7 will allow you to typically keep all of your property as long as your car and mortgage payments are current, and there is no significant equity in your property. A professional attorney should have no problem making arrangements for you to reaffirm your debt. Allowing you to keep your home, keep your car, keep your personal belongings, but eliminate your debt.

Financial Choice Network recommends you seek a bankruptcy attorney to see if you what you would qualify for and which type of bankruptcy would be best for you. For a free consultation call now, or fill out a form and we will connect you with a professional that will put you on the road to financial freedom!