Chapter 7 Bankruptcy

Chapter 7 Bankruptcy Clears Your Debt

Chapter 7 bankruptcy is also known as a liquidation plan. In a Chapter 7 Bankruptcy, we show the Court that you are unable, based upon your budget, to service the debt you carry. That's it. Approximately 90 days after we file you are granted a discharge, and you no longer owe the debt. Period.

Now, while a Chapter 7 Bankruptcy is simple in theory, there are a number of factors to consider. First you must qualify financially through a mandated "Means Test."

Nor is every kind of debt can be discharged in a Chapter 7 Bankruptcy. Debts arising from taxes, student loans, alimony, child support, drunk driving or intentional acts may not be dischargeable.

Also, if you have secured debt (debt tied to collateral like a car note or a mortgage) you have to decide if you wish to keep the property. If so, you must reaffirm the debt which effectively takes it out of the bankruptcy.