Chapter 7 Bankruptcy
Filing Chapter 7 enables you to eliminate most, if not all, of your debts. You file under Chapter 7 if your debts are largely unsecured, such as loans, credit cards and judgments. The debts are discharged and they never need to be repaid. Imagine suffering terribly under the heavy burden of debt, month after month, and suddenly, all that suffering is gone and you are debt free! That is what debtors report experiencing when they file Chapter 7 bankruptcy.
The process starts with the preparation and filing of documents called the bankruptcy "petition". After filing, a "trustee" is appointed to administer the bankrupt estate and to ensure the smooth and equitable application of the law. Approximately four weeks after the commencement of the chapter 7 bankruptcy case, the debtor appears for the meeting of the creditors. Any debts that are discharged are never ever repaid by the debtor or by anyone else. Legally, it is as if the debtor never owed the debt. You can file Chapter 7 bankruptcy no sooner than every eight years.
Bankruptcy law requires that the moment you file bankruptcy, there is an automatic stay that prohibits virtually all creditors from initiating or continuing any efforts, legal or otherwise, to collect debts you owe or to seize property of the bankrupt estate. This is known as the "Automatic Stay" and is one of the most powerful of all Federal laws. This means that the moment you file, evictions, repossessions and foreclosures must stop, at least for a while; you cannot be sued and existing lawsuits must come to a halt; creditors and collection companies cannot harass you or enforce money judgments against you. Even the government itself cannot come after you for civil debts that you owe, including income taxes.
If you have secured debts such as a car payment or a mortgage, you can still file Chapter 7 and retain the property by continuing to make the payments as usual. You are under no obligation to surrender any secured property you want to retain. You are in control and it is up to you to decide what you want to keep and what you want to surrender. When you retain us for your bankruptcy, we will provide you access to more detailed information on this topic, including how you can keep assets you may not think are possible to keep.