Chapter 7 Bankruptcy

"A Fresh Start"


Eligibility


Individuals, corporations, and partnerships are eligible to file a chapter 7.

Individual Chapter 7


Debt Relief: Obtain legal forgiveness of charge card debt, personal and bank loans, some taxes, and other debts eligible for forgiveness.
Protection of Home: Use exemption rights to keep your home, auto, and other assets.
Fresh Start: Obtain a "fresh start" and a second chance in life.

Business Chapter 7


Business Closure: In a chapter 7 the business is closed.
Liquidation of Assets: The Court appoints a trustee to sell the debtor's assets and distribute the proceeds to creditors.

What Chapter 7 Does Not Do


Mortgage Default: A chapter 7 normally does not help with a mortgage default with the exception of a one or two month delay of a threatened or pending mortgage foreclosure lawsuit or a pending sheriff's sale. A chapter 13 is normally used to deal with a mortgage default as it allows you to pay the delinquency over 5 years.
Auto Loans: A chapter 7 normally does not help with a bad auto loan. The debtor is usually required to pay the loan or return the vehicle. However, a chapter 13 can be used to modify a vehicle loan.
Certain Debts are Not Forgiven: Trust fund and more recent income taxes, education loans, claims from fraud, support, and certain other debts are not forgiven (discharged) in a chapter 7. Often a chapter 13 is used to pay non-discharged debts over 5 years.

Fees


Chapter 7 representation is based upon a one time reasonable flat fee based upon the complexity of the case plus courts costs. The fees and costs are agreed to in advance in writing.


 
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