The Benefits of a Chapter 7 Case
While a repayment plan in a Chapter 13 case may be a great option for some individuals, a Chapter 7 may work best for others.
A Chapter 7 case is a relatively quick type of bankruptcy as most cases are completed within approximately 6 months from the date of filing. Chapter 7 is a great way to eliminate unsecured debts (debts that do not have collateral) such as credit cards, medical bills, and certain loans. If you have secured debts, such as vehicle loans or a mortgage, and you want to keep your vehicle and home, in most cases you will continue making the regular payments to your creditors on those particular debts, but the Chapter 7 will not assist you in catching up on past due payments on secured debts. You do not have a payment plan approved by the Court, and assuming no objection is made by certain deadlines, the Bankruptcy Court will enter a discharge order, meaning you do not owe the dischargeable debts.
Most debts are dischargeable such as medical bills, loans, and credit cards. Examples of the types of debts that are not dischargeable include certain taxes, student loans, and domestic support obligations like child support. You will continue to owe non-dischargeable debts after the discharge order is entered and the case is concluded.
Whether a Chapter 7 is the right option for you depends on your particular circumstances. If you have household income that is higher that a certain amount, you may not qualify for Chapter 7, although not all types of income are included in determining your income for purposes of the Chapter 7. This income test is known as the means test.
Chapter 7 is also known as a liquidation type of bankruptcy. This means that if you have equity (value beyond the amount of debt) in assets that cannot be protected, a Chapter 7 Trustee appointed by the Court could sell those assets and use the funds to pay your creditors.
An experienced bankruptcy attorney can advise you on whether any of your assets would be at risk in a Chapter 7 and whether you qualify under the means test.
Chapter 7 can be a huge stress relief and gives you the opportunity to start over financially. Once a case is filed, creditors must stop collection action, with limited exceptions. If you are worried about lawsuits or wage garnishments or collections of other debts, Chapter 7 can help relieve those concerns and will:
- Eliminate most debts
- Stop creditor harassment
- Stop lawsuits
- Stop garnishments
- Help you start improving your credit score
- Provide a fresh start
Filing a bankruptcy case is complicated, and you need an experienced bankruptcy attorney to help guide you through this process. Kimberly S. Ward has been representing people just like you for nearly 20 years in bankruptcy cases in Georgia.
Call 912-764-9616 or contact me at firstname.lastname@example.org to schedule your Free Consultation.
We serve Statesboro, GA and Bulloch County, as well as the surrounding counties of Screven, Candler, Emanuel, Evans, Jenkins, Bryan, Effingham, and Chatham.
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We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code. We provide federal debt restructuring help.