Chapter 7 Bankruptcy
In my years working as a Waco bankruptcy lawyer and Killeen bankruptcy lawyer, I’ve found that the most common type of bankruptcy – Chapter 7 – is also the least understood. Let’s look at how Chapter 7 bankruptcy works, so you can better understand how this option might be the right choice for you.
Chapter 7, sometimes referred to as “straight” bankruptcy, is a relatively simple filing that relieves you of most or all of your unsecured debt. “Unsecured” means debt that isn’t backed by tangible property, such as a car, home, or boat.
Here are some examples:
- Medical bills
- Credit card debt
- Payday loans
- Lawsuit judgments
Filing for Chapter 7 bankruptcy can bring you enormous peace of mind, since it will immediately put a stop to creditor harassment, wage garnishment, car repossessions, and can actually discharge old IRS debt.
Keep in mind, though, that even though student loans are unsecured debts, they usually can’t be discharged in a Chapter 7 bankruptcy unless you are completely disabled. Also, you can’t get rid of child support payments through a Chapter 7 for any reason.
For consumers in Waco and Killeen, Chapter 7 can seem like a scary proposition, because they often think that they are going to lose their homes and vehicles when they file for bankruptcy. This simply isn’t the case. You can keep your home and car as long as you remain current on your payments to those creditors. It might seem strange to be able to keep some debts and get rid of others, but this is often the best way to get the financial relief you need without losing your most important assets.
So how does Chapter 7 bankruptcy work?
The first thing we’ll do is sit down and review your debts and assets. You’ll need to provide the names and addresses of your creditors, and the amount you owe to each one. If you have assets you want to keep, such as a car or home, we’ll note in your Chapter 7 filing that you want to keep making payments on them. After you pay your fee, I will file a petition for Chapter 7 bankruptcy for you. We offer a simple payment plan to let you pay our fees over time. While you are on the payment plan, we will tell your creditors to stop calling you and communicate only with us.
If your case is like most Chapter 7 cases, all of your assets will be considered exempt – this means you’ll get to keep them even though you’re getting rid of your debt. You will be discharged from your debt in three and a half months.
