Chapter 7 Bankruptcy
Do you want to stop creditor harassment, wage garnishment, repossession and freezes on your bank accounts? If so, working with the Law Office of Corey L. Scott, P.C. to file a Chapter 7 bankruptcy may be the answer.
In a Chapter 7 bankruptcy, which is sometimes referred to as “straight bankruptcy” or “liquidation” federal exemptions generally allow you to protect your personal property so that you generally “don't lose” any of your assets. Chapter 7 is the most common form of bankruptcy filing because in as little as four (4) months, it allows you to get rid of unsecured debts such as broken leases, credit cards, medical bills, personal loans, repossessions and certain lawsuit judgments to be discharged and you are no longer liable to pay the debt. However, it is important to note that not all debts are discharged. For instance, you still have to pay: alimony (or spousal maintenance), child support, most taxes, student loans, large purchases in excess of $500 for luxury items bought within 90 days of filing, fraudulent debts and large cash advances received within 70 days of filing. Additionally, if you want to keep your car and home you can do so by signing a reaffirmation agreement which is essentially your promise to the lender that you will continue to make the necessary payments to keep them. I will explain reaffirmation agreements when we meet for your initial consultation. Call us now at 317.634.0101 to schedule your free consultation.
Is Chapter 7 right for me?
Every person or family has a very unique set of circumstances, so there is no one size fits all answer to this question. However, Chapter 7 bankruptcy may be a good option for you if you:
- Are being harassed by multiple creditors on a daily basis?
- Are living from paycheck to paycheck and cannot pay your bills?
- Are getting notices that your mortgage or loans are being foreclosed?
- Are receiving threats that your car is going to be repossessed?
- Are experiencing a major financial setback such as divorce, job loss or a costly illness?
- Do not have sizable assets or secured loans and simply need a fresh start?
Qualifying for Chapter 7 Bankruptcy
Federal bankruptcy laws provide for a “means test” which determines whether you are qualify to file for Chapter 7 bankruptcy protection. Generally, if your income is at or below the median income for families in Indiana, based on Census Bureau statistics, you will qualify. However, if you make more than the median income for families in Indiana, your income over the last six (6) months is considered, along with car and mortgage payments, back taxes and child support due, and school expenses up to a certain amount. My office will be able to quickly assess whether you qualify for Chapter 7 protection during your free consultation. Please call now to find out if you qualify, phones are answered 24/7 at 317.634.0101.
After I qualify, how does the Chapter 7 process work?
Soon after you provide my office with the necessary documentation, which usually includes: your last 3 pay stubs, last three (3) years of tax returns, your most credit report if you one, if not we can pull your report for you and a completed bankruptcy questionnaire, we are ready to file your petition. However, it should be noted that new federal bankruptcy law requires that any overdue tax returns be filed within weeks of filing a Chapter 7 bankruptcy and you must complete approved credit counseling prior to filing and a debt management course after the filing but prior to the discharge of your bankruptcy.
Your bankruptcy begins with the filing of the petition, schedules and a “statement of affairs” with the bankruptcy court. The petition will include a complete list of all assets, creditors, income, and potential assets such as personal lawsuits and inheritances. When the bankruptcy is filed, all creditors receive notice that you have filed for Chapter 7 protection and an “automatic stay” immediately goes into effect, which prevents your creditors from any further attempts to collect on your debts by phone calls, letters or lawsuits. It also stops garnishments immediately once my office provides your payroll department with notice of your filing.
Approximately twenty (20) to forty (40) days after you file your petition, the trustee will hold the “first meeting of creditors” or “341 meeting.” This is the only hearing that most people have to attend. It is called the first meeting of creditors because in theory, this is the hearing that creditors can come to voice any objection that they have to you discharging your debts through Chapter 7 bankruptcy. However, in reality, creditors almost never attend the hearing, so you and I will attend the meeting and the trustee will ask questions to verify your identity and address and assure that you have listed all of your assets, creditors and income. A typical 341 meeting lasts about five (5) to ten (10) minutes. Following the 341 meeting, you will likely receive notification in the mail that your unsecured debts have been discharged and that you are no longer obligated to pay them.