Some common questions about filing for Chapter 7 Bankruptcy
Updated: May 24, 2019
Katherine Hall, Attorney
"I am considering filing bankruptcy, but I have heard so many different things about the process."
Frequently asked questions and answers about filing bankruptcy:
What types of bankruptcy cases does Weaver Law Firm handle?
We file Chapter 7 bankruptcy cases.
What is a Chapter 7 bankruptcy? A Chapter 7 bankruptcy is a liquidation bankruptcy which allows the debtor to discharge general unsecured debts. These general unsecured debts include credit cards and medical bills, past due utility bills, personal loans, collection agency accounts, and others.
How do I know if I qualify to file a Chapter 7 bankruptcy? Individuals looking to file this type of bankruptcy must pass the Chapter 7 Means Test. Eligibility is determined through income brackets that look at the debtor’s income and household size. If you make too much money, you may be required to file a Chapter 13 bankruptcy.
What does the bankruptcy process look like and how long does it take? Often people prefer a Chapter 7 bankruptcy because it is a quicker process – only about 3-6 months until discharge. Once a debtor files for Chapter 7 bankruptcy, a trustee will be appointed to administer the case. In most Chapter 7 cases you will only go to court once for a short meeting with the trustee. The bankruptcy trustee will ask standard questions required of all debtors, as well as specific questions about answers in your filed petition. The trustee reviews the bankruptcy petition that is filed with the court and will sell any nonexempt assets to pay back creditors. Most clients in a Chapter 7 bankruptcy are able to exempt the majority of their real and personal property. If all of the debtor’s assets are exempt, the creditors will receive nothing.
Will all my debts be canceled in bankruptcy? What will happen to my assets? Debtors in a Chapter 7 bankruptcy get to discharge the majority (and often times all) of their unsecured debts, while keeping most (and often times all) of their assets.
What documents will I need? Tax returns for the past 2 years, income documentation for the six-month period before filing the bankruptcy petition, proof of real estate fair market value, proof of vehicle fair market value, retirement and bank account statements, driver’s license, social security card.
How will a bankruptcy filing affect my future?
A Chapter 7 bankruptcy filing will stay on your credit report for 7-10 years, However, this does not prohibit you from obtaining new credit and moving on with your life.