Chapter 7 is one of the most familiar forms of bankruptcy for private citizens. In essence, a court-designated trustee sells your nonexempt property to earn money that goes towards paying off your debt. The only question is how you’ll manage the process and still come out with enough to maintain the lifestyle you’re accustomed to.
Why Do People File for Chapter 7?
Contrary to popular belief, liquidation doesn’t mean that you have to sell the shirt off your back to stop your creditors from hounding you. Chapter 7 only applies to certain nonexempt assets. In return, you gain legal protection from being held personally liable for your debts. Courts may also grant you discharges for many types of debt to give you a fresh start without having to pay off the complete sum of what you owe.
How Does Filing Work?
To obtain Chapter 7 bankruptcy, you must file a petition with your regional bankruptcy court. Your filing also needs to include full disclosures of your:
- Assets and liabilities
- Statements of financial affairs
- Executory contracts and current leases
- Tax returns or transcripts
- Certificates of credit counseling
- Debt repayment plans
- Current expenditures and incomes
Once you file and pay the appropriate fees, courts apply a rubric to determine your eligibility and evaluate your case on an individual basis. Your filing also automatically bars your creditors from taking collection actions against you.
After a few weeks, you’ll go before a trustee and your creditors to answer questions about your financial status under oath. Later, the judge who hears your bankruptcy case will use this information to decide whether to grant you protection. If your filing succeeds, the trustee will commence liquidating your property in a way that covers as much of your nondischargeable debt as possible.
The Value of Sound Legal Aid
Although Chapter 7 may seem straightforward, there’s ample potential for things to go wrong. Your ability to win protection depends on whether you file the correct documentation and perform a thorough self-investigation to clarify your current financial standing. For many people who possess excessive debt, these necessities can seem overwhelming.
At Elkington Shepherd LLP, we work to relieve the burdens of filing for Chapter 7 bankruptcy. By keeping you up to date on the time-sensitive legal hurdles you have to jump through and helping you compile the necessary information to file successfully, we make it easier to secure protection and enjoy the fresh start you deserve.
We offer comprehensive paperwork completion, free credit reports and direct case management by qualified lawyers.
Leverage your legal right to debt relief. Call us now at (510) 465-0404 to book a complimentary Chapter 7 case assessment with our passionate attorneys.