As of October of 2005, sweeping changes were made to the Chapter 7 bankruptcy laws. To qualify for a Chapter 7, individuals and families who wish to file must now meet what is called a “means test”. The means test measures your income and expenses and determines if Chapter 7 is available based on what is left over at the end of the month. Our attorneys (not a secretary or paralegal) will personally review with you this information and determine whether you qualify for a Chapter 7. Call us or press “Contact” above to set up an office appointment or webcam appointment. WE CAN HELP! 
       This is the type of case most people think of when they hear the word "bankruptcy." Chapter Seven is designed to eliminate overwhelming unsecured debt such as credit cards, medical bills, signature loans, pay day loans, overdraft loans and deficiency balances. Even loans that are secured by an item of collateral can be included in a Chapter Seven if you do not wish to keep the collateral. In other words, if you have an "upside down" car loan (usually accompanied by a high rate of interest) you can use Chapter Seven to return the vehicle and not have any fear of the creditor trying to sue you for the deficiency balance.
       Chapter Seven can be tricky! The Court always appoints a Trustee in each case. The Trustee is NOT on your side - he's trying to find a way to pay these unsecured creditors from your non-exempt assets. Also, the Trustee looks for situations in which any creditor or relative has received a substantial payment or transfer of property from you before filing the bankruptcy. The Trustee can sue the creditor or your relative to recover the transferred money or property for the benefit of all your creditors.

Also, creditors have a right to object to your bankruptcy. If a creditor feels that its loan or credit card has been fraudulently obtained or used, a "mini" lawsuit in your bankruptcy case can be filed by the creditor. The creditor can ask the Court to declare that its claim should survive the bankruptcy and not be discharged. A creditor or the Trustee can also claim that you were not truthful when filling out the bankruptcy paperwork. Consequently, truthful disclosure in your bankruptcy case is essential and professional assistance is extremely helpful.
 

As discussed above, you are entitled to keep certain property exempt from the Trustee or creditors in bankruptcy. Exemptions include the house that you are buying and live in; certain personal property; pension and 401k plans; and a portion of a vehicle titled in your name.  There are other exemptions such as workmen’s comp. claims, social security, and disability payments.

 When your bankruptcy case is successfully concluded, the Court will issue you a Discharge which eliminates the debts (certain exceptions apply) and serves as a permanent injunction to creditors which tells creditors “Do not attempt to collect this debt.” Of course, if you wish to keep your house or car, you must continue making the mortgage or lien payments when due. (Sorry- no free houses or cars!!).  The Discharge also has important credit rebuilding potential when submitted to the credit bureau – because you have eliminated your previous debt, you now have a fresh start.