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Chapter 7 bankruptcy, often called “liquidation bankruptcy,” allows individuals to eliminate most of their unsecured debts, such as credit card debt, medical bills, and personal loans. The process typically involves selling non-exempt assets to repay creditors, but many people find they can keep most, if not all, of their property.
To qualify for Chapter 7, you must pass a means test that compares your income to the median income in your state. If your income is below the median, you generally qualify. If it’s above, you may still qualify based on your expenses and debts. The means test is designed to ensure that Chapter 7 is reserved for those who truly need it.
Chapter 7 can discharge many unsecured debts, including:
-Credit card debt
– Medical bills
– Personal loans
– Utility bills
– Some tax debts (under specific conditions)
However, not all debts can be discharged. These include:
– Student loans (except in cases of undue hardship)
– Child support and alimony
– Most tax debts
– Court fines and penalties
The fear of losing property is common, but many people keep most or all of their belongings through exemptions. Exemptions protect certain assets from being sold to pay off creditors. These can include your home, car, retirement accounts, and personal items. The specific exemptions you can claim depend on your state’s laws.
The Chapter 7 process typically takes about 3 to 6 months from start to finish. After filing your petition, you’ll attend a meeting of creditors (also known as a 341 meeting) where you’ll answer questions about your finances. If all goes smoothly, the court will issue a discharge order, relieving you of the responsibility to pay the discharged debts.
Many people find they can begin rebuilding their credit within a year or two after filing. However, filing for Chapter 7 bankruptcy will negatively impact your credit score, and the bankruptcy will remain on your credit report for up to 10 years. Even so, it is highly likely that you may receive credit offers shortly after your discharge, but it’s important to rebuild credit wisely.
Yes, but there are time limits. If you’ve previously filed for Chapter 7, you must wait 8 years from the date of your previous filing to file again. If you’ve filed for Chapter 13 bankruptcy, you must wait 6 years to file for Chapter 7.
Whether you can keep your car and home depends on your situation. If you’re current on your car or mortgage payments and your equity doesn’t exceed your state’s exemption limits, you may be able to keep these assets. However, if you’re behind on payments or your equity is too high, you may have to surrender the property.
Before filing, it’s important to gather all financial documents, including income records, a list of debts, and information about your assets. You’ll also need to complete a credit counseling course from an approved provider within 180 days before filing. Consulting with a bankruptcy attorney can help ensure that you’re fully prepared and understand your options.
The cost of filing for Chapter 7 bankruptcy includes court filing fees and attorney fees. Court fees are typically around $338, and attorney fees vary depending on your case’s complexity. Our firm offers flexible payment plans to make the process more affordable.
Yes, filing for Chapter 7 bankruptcy triggers an automatic stay, which immediately stops most collection activities, including wage garnishment, creditor calls, and lawsuits. This protection lasts throughout your bankruptcy case and can provide much-needed relief from financial stress.
The first step is to schedule a free consultation with our office. We’ll review your financial situation, answer your questions, and help you determine if Chapter 7 bankruptcy is the right choice for you. Contact us today to take the first step toward a fresh financial start.
Chapter 13 bankruptcy, often referred to as a “wage earner’s plan,” allows individuals with regular income to develop a plan to repay all or part of their debts over 3 to 5 years. Unlike Chapter 7, which involves liquidating assets, Chapter 13 allows you to keep your property while catching up on past-due payments through a court-approved repayment plan.
To qualify for Chapter 13 bankruptcy, you must have a regular source of income and your secured and unsecured debts must fall below certain limits. As of 2024, unsecured debts must be less than $2,750,000 and secured debts must be less than $1,375,000. If your debts exceed these amounts, you may need to consider Chapter 11 bankruptcy instead.
In Chapter 13, you’ll propose a repayment plan that lasts 3 to 5 years. The plan will detail how you intend to pay off your debts, which may include mortgage arrears, car payments, taxes, and other obligations. Once the plan is approved by the court, you’ll make regular payments to a bankruptcy trustee, who will then distribute the funds to your creditors.
A Chapter 13 plan prioritizes certain debts, including:
– Priority debts: These must be paid in full and include obligations like child support, alimony, and most tax debts.
– Secured debts: These debts are backed by collateral, such as your home or car. Your plan may allow you to catch up on missed payments or modify loan terms.
– Unsecured debts: These include credit card debt, medical bills, and personal loans. You may only have to repay a portion of these debts, depending on your disposable income.
Yes, filing for Chapter 13 bankruptcy initiates an automatic stay, which stops foreclosure proceedings and other collection activities. If you’re behind on your mortgage, Chapter 13 allows you to catch up on missed payments over time, which can help you keep your home.
Chapter 13 bankruptcy will stay on your credit report for 7 years from the date of filing. However, because Chapter 13 involves repaying your debts, it’s generally viewed more favorably than Chapter 7 by creditors and lenders. You may be able to rebuild your credit during and after your repayment plan.
Yes, under certain circumstances, you can request a modification to your Chapter 13 plan. Common reasons for modifications include a change in income, unexpected expenses, or a creditor’s objection. It’s important to work closely with your attorney to ensure that any modifications are approved by the court.
If you miss a payment under your Chapter 13 plan, it’s crucial to contact your attorney immediately. Missing payments can jeopardize your bankruptcy case, potentially leading to dismissal. However, the court may allow you to modify your plan or make up the missed payments, depending on your situation.
Yes, in most cases, you can keep your car in Chapter 13 bankruptcy. Your repayment plan may include your car loan, allowing you to catch up on missed payments or even reduce the loan amount if your car’s value is less than what you owe. This process is known as “cramdown” and can be a significant benefit of Chapter 13.
The costs of Chapter 13 bankruptcy include court filing fees and attorney fees. The court filing fee is typically around $313, and attorney fees vary based on the complexity of your case. The Bankruptcy Court generally advises attorneys a reasonable fee for a Chapter 13. Most attorneys will charge this set fee, but a difference may be what is charged up front (pre-filing fee) and how much of the amount is paid through the Chapter 13 plan. Our firm offers flexible payment options, allowing you to pay attorney fees over time as part of your repayment plan.
Chapter 13 bankruptcy imposes an automatic stay on most collection activities, protecting you from creditor harassment, wage garnishments, and lawsuits. Creditors are required to follow the terms of the court-approved repayment plan, and any remaining debts that are not paid off by the end of the plan may be discharged.
If you’re considering Chapter 13 bankruptcy, our experienced team is here to help you understand your options and navigate the process. Call us today or fill out our online contact form to schedule your free consultation.
Yes. Our immigration practice includes family‑based petitions, green cards (adjustment and consular processing), fiancé(e) visas, naturalization, asylum and other humanitarian relief (U, T, VAWA, SIJS, TPS, DACA), NACARA, and removal defense in Immigration Court.
No, we do not offer free consultations for immigration matters. However, our consultations are lower than average—just $100. During your consultation, we review your goals, eligibility, timelines, and documentation, so you leave with a clear, informed plan.
Absolutely. We offer bilingual representation in English and Spanish, provide translated explanations when needed, and ensure you understand each step of your case.
