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Under Chapter 7, you, as a debtor ask the bankruptcy court to erase (discharge) the debts owed.

 


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Chapter 7

Under Chapter 7, you, as a debtor ask the bankruptcy court to erase (discharge) the debts owed. Chapter 7 will, in most instances, allow you to keep your home and vehicles, as long as monthly payments are maintained. A Chapter 7 bankruptcy will wipe away unsecured debt such as medical bills, credit cards and personal loans.


Chapter 7 will not stop a foreclosure or repossession of vehicles. To keep a secured debt, a “Reaffirmation Agreement” must be filed with the Court. A reaffirmation is an agreement between you and the creditor in which you promise to pay all or a portion of the money owed to the creditor, even though you have filed bankruptcy. In return, the creditor promises that as long as payments are made, the creditor will not repossess or take back the automobile/home or other property. Basically, you are agreeing to keep the original terms of the loan.


Discharge

The primary objective in a Chapter 7 bankruptcy is to receive a discharge.


Chapter 7 bankruptcies typically are completed or discharged in three to six months. A discharge releases you from personal liability on debts and prevents creditors from taking any action against you or your property.


Most claims against Chapter 7 debtors are discharged. A creditor whose unsecured claim is discharged may no longer initiate or continue any legal or other action against you to collect a debt.


Among the types of debts which are not discharged in a Chapter 7 case are fraud (including NSF checks), alimony, child support, debts ordered to pay in a divorce, certain taxes, student loans, debts for willful and malicious injury by you to another entity, debts for death or personal injury caused by you if you were using non prescription drugs or alcohol at the time of the injury, and debts resulting from criminal activities. These debts will not be discharged in a Chapter 7 bankruptcy and you will be responsible for them after the bankruptcy is completed.


What can a Chapter 7 bankruptcy do for me?

Chapter 7 bankruptcy will do the following:



Your Bankruptcy Will Not...

Eliminate certain rights of secured creditors, eliminate child support, alimony, student loans, criminal fines, or taxes.


How often can I file Chapter 7 bankruptcy?

You can only receive a discharge once every eight (8) years, meaning you can only file Chapter 7 once every eight (8) years. However, if the need for a bankruptcy arises again you may file a Chapter 13 instead of a Chapter 7. This matter should be discussed with your attorney.


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