Chapter 7 Bankruptcy
The most common discharged debts include:
- Credit cards
- Medical bills
- Payday loans
- Past due federal income taxes
- Judgments filed against you in a court of law
- Old utility, cable and cell phone bills
- Balances remaining after broken leases, foreclosures and repossessions
The powerful “automatic stay” takes effect as soon as a bankruptcy is filed. It stops creditors from calling or sending you demand letters, stops any pending lawsuits against you, prevents enforcement of pre-existing judgments and cuts off garnishments of bank accounts and paychecks.
You can also take advantage of the fresh start of a Chapter 7 bankruptcy to legally terminate contracts, such as mortgages, car loans, leases and rent-to-own agreements. This can prove helpful if the item you financed is now worth less than the balance remaining on the contract. You will not have to repay the remaining balance but will most likely have to surrender the collateral.
By taking advantage of the generous federal and state bankruptcy exemptions better than 95% of our clients don’t lose any of their property to the Trustee. You can keep your house and car as long as you continue to make the payments on time.
The general rule is that only debtors whose gross income is below the median income level per household size qualify to file for Chapter 7 bankruptcy, though there are a couple of important exceptions. Determining whether you qualify to file for Chapter 7 bankruptcy is a complicated calculation that usually requires the expertise of a knowledgeable bankruptcy attorney.
You should consider Chapter 7 Bankruptcy if…
… 1) you are saddled with at debt that would take you more than 5 years to pay off; 2) you are quickly draining your retirement or savings accounts just to stay afloat; 3) you are obligated under a long term, money-losing contract; or 4) you personally guaranteed business loans that you can no longer afford to repay.
…you can eliminate most unsecured debts within 4 months of filing, legally terminate unfavorable contracts and stop creditors from harassing you – all without having to report forgiven debt as income on your tax return. Most people do not lose any property they want to keep.
…that initially it will have a negative impact on your credit score. The bankruptcy trustee can seize any valuable assets that are not exempt. If you are behind on payments for a secured debt like your mortgage or car loan the lender can get the court’s permission to seize the collateral.
The costs of a Chapter 7 Bankruptcy with NoWorriesBankruptcy.com is a flat fee based on the complexity of your case and on your location. For many of our Chapter 7 cases we will typically charge as little as $899 as a flat fee for the attorney fees. All costs will be spelled out for you during your free initial consultation before you commit to anything. The court charges a $335 filing fee in addition to attorney fees. However, you may qualify for a fee waiver from the court which may save you from having to pay any filing fees at all.