Questions About Chapter 7
Questions about bankruptcy? Our firm can help guide you through the process. From a free initial consultation about what options are available to you, to gathering the proper documents and walking through the entire process.
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What is a Chapter 7 Bankruptcy?
Chapter 7 or Straight Bankruptcy allows an honest debtor to have the court “discharge” or cancel most of his or her debts in order to obtain a fresh start.
What if I earn a lot of money after I file? Will I have to repay the bills?
No, you won’t. The court cannot order you to pay bills out of future income, wages, commissions or profits that you may receive.
What happens if I bought a car financed by a bank, credit union, auto finance company or other creditor?
You will be able to keep your car. However, you must continue to make the monthly payments on time, and you must sign a reaffirmation agreement, in which you promise to make those payments.
What kinds of bills are discharged in Chapter 7?
These bills will be discharged:
- Medical bills, including hospital and doctor fees.
- Back rent, telephone and utility charges that are in arrears.
- Bank, credit union, signature loans, veterans’ assistance loans and finance company loans.
- Revolving credit such as MasterCard, Visa, American Express and oil company credit cards.
- Attorneys, legal and court fees.
- Overdrafts or deficiency balances on bank accounts.
- Record or book clubs.
- Storage fees, leases and rentals.
- Most debts owed due to a car accident.
- Most business debts.
Are there any time limits on the bills I want to have discharged?
You can include bills you have not paid for five, 10 or more years, and those that are only a week old. However, if you have incurred a large bill shortly before filing, that bill might not be discharged. This rule usually applies to a consumer debt of more than $500 owed for a luxury item to a single creditor for purchases made within 90 days of filing, or for cash advances of more than $750, which have been incurred within 70 days of filing.
Do I ever have to repay the bills I list on my bankruptcy petition?
No, unless you choose to do so.
Is there any alternative to filing Chapter 7?
Yes. You can file a debt consolidation plan under Chapter 13. A large proportion of those who file bankruptcy could pay all or some of their bills through Chapter 13 if they knew more about it.
How soon after I file Chapter 7 bankruptcy can I file Chapter 7 again?
What are the advantages of choosing a Chapter 7?
1. You would discharge most of your debts, and be able to start again without a deficit budget.
2. All collection and garnishment attempts would stop.
3. If money problems had been seriously affecting your psychological well-being or your marriage, these problems may be relieved by filing a bankruptcy petition.
4. You can usually choose before you file what property will be exempt, and therefore what you will keep.
5. You can fulfill any ethical or moral obligation you feel by voluntarily repaying or making a partial repayment to anyone after your debts are discharged or by reaffirming that debt.
I filed a Chapter 7 ten years ago. Can I file again?
Yes, you can file now. Debtors will not be able to file Chapter 7 for 8 years after filing Chapter 7. If they file a Chapter 13, they can’t file for Chapter 7 and get a discharge for 4 years. After filing a Chapter 13, they can’t file and get another Chapter 13 discharge for 2 years. All the time periods run from filing date to filing date.