What is Chapter 7?
Chapter 7 is the chapter of the Bankruptcy Code that deals with liquidation.
What happens when I file under Chapter 7?
A person who files under Chapter 7, referred to as the debtor, must turn his or her nonexempt property, if any exists, over to a trustee. The trustee is an employee of the Bankruptcy Court who must convert the nonexempt property to cash and as a way to pay the debtor's creditors. Once this is done the debtor receives a Chapter 7 discharge and must obey all Court orders.
Am I eligible to file under Chapter 7?
As long as you reside in, have property in or do business in the United States of America you may file for Chapter 7 discharge. However, if you have been involved in another Bankruptcy case that was dismissed within the past 180 days may not be eligible to file. If you are concerned contact Lapina & DuBois, P.A. for a free consultation to determine your eligibility.
What does a Chapter 7 discharge mean?
When the Bankruptcy Court issues a discharge under Chapter 7, the court is releasing a debtor from all of the dischargeable debt and restricting the creditors who were owed money from attempting to collect any portion of the debt. In basic terms once a discharge is issued the debtor is released from debts to creditors and does not have to pay. This does not necessarily discharge all debt you owe, some debts are not dischargeable under Chapter 7 of the Bankruptcy code, and you should consult an attorney as to what is dischargeable.
What is not dischargeable under Chapter 7?
• If you obtained debt by fraud, falsified financial statements or under any misleading information. The person or entity whom you owe the money (creditor) must file a complaint in the case.
• If you have filed bankruptcy before and did not discharge all of your debt any "carry-over" debt from that case is not dischargeable this time.
• Debts owed as a result of an accident resulting in injury or death during the operation of a motor vehicle while intoxicated.
• Any debts that were not listed on your chapter 7 forms filed by your attorney. However, if the creditor knew of your bankruptcy filing in time to file a complaint, they may be dischargeable.
• Any debts obtained by or for fraud, embezzlement, or larceny, if the creditor files a complaint in the case.
• Debt owed by you for alimony, maintenance, support, and in some cases divorce-related debts including property settlement debts.
• If the creditor files a complaint any debts for intentional or malicious injury to a person or property of another.
• Certain fines or penalties.
• Most debts incurred for educational benefits and student loans due within the last seven years.
• Tax debts and debts as a result of the need to pay past federal taxes.
What Persons Are Not Eligible For A Chapter 7 Discharge?
• If you have filed for Chapter 7 discharge in the past six years.
• If you fail to explain any loss or deficiency of your assets.
• Any person found not to comply with the Orders of the bankruptcy Court.
• If you filed a waiver of discharge.
• Any person who is found to have transferred, sold or destroyed valuables in an effort to prevent trustee from distributing the proceeds to the creditors.
• If you are found to have concealed, destroyed, or falsified records of your financial condition or business transactions.
• If you have filed for Chapter 13 discharge in the past six years, unless during your Chapter 13 case you paid off 70% or more of the unsecured debt owed.
• If you make false statements in your filings or to the trustee during your meeting/interview.
