An Individual Chapter 7 bankruptcy is a petition to discharge (forgive) the debtor from his or her unsecured debts. This type of bankruptcy is designed primarily to help individuals with overwhelming debt and not enough income to pay back the debt.
Every year, thousands of Texans eliminate their unsecured debt through Chapter 7 Bankruptcy. Chapter 7 refers to the Chapter of the Bankruptcy Code in which a qualified debtor can obtain a discharge, which bars creditors from taking legal action to collect unsecured debts, such as credit card debt, medical bills, payday loans, lines of credit, and past due utility bills. Chapter 7 Bankruptcy offers a quick way to address your debts when you are unable to repay them over time. Unlike Chapter 13 Bankruptcy, Chapter 7 is designed to rapidly discharge and eliminate your growing debts for good. If you are struggling with outstanding debts, Chapter 7 may offer a perfect solution.
Although the process of Chapter 7 Bankruptcy may seem complex and overwhelming, I have the experience and knowledge to assist you during this difficult time. As a Chapter 7 Bankruptcy attorney, I can successfully guide you through this process from beginning to end. For a free consultation regarding Chapter 7, please call my office at (817)-732-7590 or (972)-819-3861. You can also send an E-mail or complete the Free Case Evaluation.
IN MOST CASES YOU CAN KEEP YOUR PROPERTY
Many people mistakenly believe that filing Chapter 7 Bankruptcy will lead to a complete liquidation or sale of their personal property. This is not true in the vast majority of bankruptcy cases. Although a Chapter 7 Bankruptcy Trustee will be assigned to your case with the right to sell your “non-exempt” property, he or she cannot sell your exempt property. In some cases, depending on the exemptions available, the Trustee cannot even take your non-exempt property. In almost all of our Chapter 7 cases, ALL property is “exempt.” This means our clients get to keep all their property and start over with a clean slate.
The following is a list of some of the property that may be claimed as “exempt” in Texas: (1) homestead; (2) wages; (3) one vehicle per filer; (4) personal property (including up to $30,000 worth of any personal property, including a car, for a single adult, and up to $60,000 worth of any personal property, including a car, for a family); and (5) 100% percent of certain health aids and religious books.
CHAPTER 7 BANKRUPTCY PROVIDES FAST RELIEF
Chapter 7 cases move relatively swiftly through the legal system. My clients typically receive a discharge within approximately four months. The more basic the case, the quicker it moves through the system.
A Chapter 7 discharge refers to the successful elimination of unsecured debts, such as credit card debt, medical bills, certain loans and judgments, deficiencies on repossessed vehicles, and certain tax debts. Debts that can’t be discharged, or can only be discharged under special circumstances, include child support obligations, student loans, and a number of IRS tax debts.
ELIGIBILITY FOR CHAPTER 7 BANKRUPTCY
In 2005, Congress changed the eligibility requirements for Chapter 7 Bankruptcy. Before filing, you must now complete a Means Test, which helps determine whether you qualify to file. The Means Test looks at your income, debts, and assets. Because Chapter 7 Bankruptcy is a powerful debt relief solution, Congress wanted to ensure it is utilized solely by people who are truly in financial need. Despite what you may have heard regarding the new law, most of our Chapter 7 clients still qualify for Chapter 7 relief. If you do not qualify, there is still powerful relief available through Chapter 13 Bankruptcy.
FILING THE CHAPTER 7 BANKRUPTCY PETITION
The process for filing a Chapter 7 Bankruptcy begins at my office. During the FREE consultation, we will meet face to face to discuss your financial situation and determine whether Chapter 7 is the right solution for you. After this meeting, I will need to obtain paystubs for the last six months, your most recent tax returns, information on your vehicle(s), information on your residence, and a list of your debts. We will run credit reports to pull a list of all reported debts, but it will be important to search for any missing debts, such as medical bills and payday loans. Once we have this information, my office will begin preparing your Bankruptcy Petition and all related Forms and Schedules.
Federal law requires that we include your personal financial information in the Bankruptcy Petition and Schedules, which includes your income, expenses, assets, and liabilities. It is important to disclose all of your debts when filing for Chapter 7 Bankruptcy, including debts owed to family and friends. In addition, you must disclose all your property, including time shares, recreational vehicles, trailers, boats, and all real property. Failure to list certain debts or property may be an honest mistake, but Bankruptcy Trustees may view such inconsistencies as fraudulent, and you can be prosecuted. So it is critical to be cautious and thorough prior to filing.
After completing the necessary forms, you will be required to complete an approved credit counseling course. My office will recommend an inexpensive course which can be completed by telephone or online. Once you complete the credit counseling course, you will receive a certificate which my office will fil with your Bankruptcy Petition.
Before filing your Chapter 7 Bankruptcy Petition, I will meet with you in person to sign and date the documents. This is a requirement under the federal law. All fees for your case must be paid before filing, including the filing fee of $306 and your legal fees. Unlike some firms, we offer a very flexible and manageable payment plan for Chapter 7 Bankruptcy cases. I would be happy to discuss all the fees and payment plan options during your FREE consultation.
HOW FILING FOR CHAPTER 7 BANKRUPTCY PROTECTS YOU
After my office files your Chapter 7 Bankruptcy Petition, the Court will send a “Notice of Commencement of Case” to each of the creditors listed in your case to notify them of the Bankruptcy filing. Your friends, employer, bank, and relatives will not be sent notice unless they are a creditor, a co-Debtor with you, or otherwise financially affected by your Bankruptcy filing (e.g. your friend is also your landlord and you want to break the lease through the Bankruptcy process). Filing a case also creates an “automatic stay,” which stops your creditors from taking action against you including, but not limited to, calling you, sending mail, filing a lawsuit, continuing a lawsuit, and collecting on a judgment. In Chapter 7, the automatic stay specifically STOPS utility shut-offs, lawsuits and wage garnishments, and some IRS collection activities, including tax levies and property seizures.
If you filed for Chapter 7 Bankruptcy in the past, the law may grant only a temporary automatic stay. In this extraordinary circumstance, I can draft the necessary Motion with the Court to extend the stay and protect you during the case. As an experienced Fort Worth Bankruptcy lawyer, I can advise you about your unique circumstances and determine whether any such limitations apply to you.
The automatic stay will remain in effect until one of the following occurs: (1) you successfully complete the Bankruptcy and receive a discharge; (2) the Court lifts the stay at your request or a creditor’s request for various reasons; or (3) the property you wanted to protect is no longer part of the Bankruptcy estate. In most cases, the automatic stay lasts for the entire duration of the Bankruptcy. When you receive a discharge at the end of the case, the automatic stay becomes, in effect, permanent. The debt will be eliminated, and you can move on with your life.
THE CHAPTER 7 TRUSTEE AND THE MEETING OF CREDITORS
If you have secured property, we will prepare and file a “Statement of Intention” with your Bankruptcy Petition. The Statement of Intention indicates whether you intend to keep any secured assets or surrender them to your creditors. After we file the Statement, you have 45 days to act on the plans set forth in the Statement and either surrender the property or reaffirm the debt and make a payment.
The Court will assign a Chapter 7 Bankruptcy Trustee to administer your case. The Trustee is a federal employee appointed by the Court to monitor your Bankruptcy and determine whether it should be confirmed or dismissed. Trustees are usually attorneys with extensive Bankruptcy law experience. The Trustee will review your Petition, make sure it is complete, and conduct a “Meeting of Creditors”. While the Trustee is required to be independent and disinterested in your case, he or she works primarily on behalf of your unsecured creditors.
The Meeting of Creditors is a meeting held by your Chapter 7 Trustee about forty-five days after we file your Bankruptcy with the Court. This meeting is an opportunity for the Trustee and your creditors to attend and ask you questions under oath. The Trustee will go through all the documents we submitted on your behalf and confirm whether everything is correct and complete. Although creditors are permitted to question you during the Meeting, this rarely occurs. In most cases, the creditors do not appear.
After the Meeting, your creditors have thirty days to object to your exemptions and sixty days to object to the discharge of certain debts, based on specific statutory reasons. The Trustee can also move to dismiss your case during the 60-day time period, if he or she finds that you abused or violated any of the rules or laws under the Bankruptcy Code. If no objections are filed by a creditor, and the Chapter 7 Trustee does not find that your case is “abusive”, then you will likely receive your Chapter 7 Bankruptcy Discharge once the 60-day period elapses. At that time, you will be free from your unsecured debts.
Before the Court discharges your case, you must complete an approved debtor education course. Once you complete this second course, you will receive a certificate which we will file for you.
LEARN MORE ABOUT CHAPTER 7 BANKRUPTCY TODAY
If you are struggling with your finances and need a rapid way to eliminate your debts, Chapter 7 Bankruptcy may offer the relief you seek. As anexperienced and dedicated Chapter 7 Bankruptcy attorney, I can offer advice on how to proceed based on your particular situation. You and I can meet face to face to discuss your options. I look forward to helping you become debt free. To schedule a FREE consultation, please contact me at (817)-732-7590 or (972)-819-3861. You can also send an E-mail or complete the Free Case Evaluation.