Chapter 7 Bankruptcy

Is Chapter 7 bankruptcy right for you?

Often called a “straight” bankruptcy, chapter 7 bankruptcy is the quicker of the two personal bankruptcy chapters to file. Debtors usually receive their discharge within months after they file and they are generally allowed to keep any money they earn after they file.

In Chapter 7, debtors are required to give up “non-exempt” property. Note that laws in New Hampshire and Massachusetts have different requirements. It is not unusual for debtors in bankruptcy to keep their home, cars, pension and other assets. Part of the initial appointment is determining whether you fall into this category. Most debts will be dischargeable, however some will not be like support obligations, student loans and most tax liabilities. Determining exempt property (or property you are allowed to keep) and knowing how to handle the issues of dischargeable and non dischargeable debts are the most important reasons to be fully prepared before you file. Since Attorney Gaudreau is Board Certified in Consumer Bankruptcy Law, he is highly experienced and will be able to address these issues for you.

Who Can Qualify?

To be qualified for relief under Chapter 7 bankruptcy, the debtor may be an individual, a partnership, a corporation, or other business entity. Chapter 7 consumer debtors are required to pass a means test which establishes that a debtor cannot afford to pay off some of their debt (business debt doesn’t have to pass this test). Chapter 7 cannot be filed if during the preceding 180 days a bankruptcy petition was dismissed due to the debtor’s willful failure to appear before the court or comply with the court’s orders.

Secured creditors may continue to retain some rights to seize property for an underlying debt even after a discharge is granted. If the debtor wishes to keep certain secured property, such as an automobile, he or she may decide to ‘reaffirm’ the debt. A ‘reaffirmation’ is an agreement between the debtor and the creditor that the debtor will remain liable and will pay either a portion or all of the money owed. In exchange, the creditor agrees not to repossess the property as long as the debtor continues to make timely payment on the debt. The court requires that an attorney explain the ‘reaffirmation’ process and that the debtor sign a document stating that s/he fully understands the agreement being made.

Contact Us Today

If you think Chapter 7 Bankruptcy may be right for you, give our office a call to schedule your free initial consultation.