Chapter 7 Bankruptcy – Liquidation
Chapter 7 bankruptcy is the type of bankruptcy most people are familiar with.
What is Chapter 7 Bankruptcy?
Chapter 7 Bankruptcy is a form of bankruptcy in which a Trustee liquidates or sells assets that are not exempt. Liquidation generally occurs at auction. The Trustee keeps a portion for themselves and the rest goes to creditors. The bankruptcy code ranks creditors by importance, as a result, some get more money than others.
For information on exempt property click HERE.
For information on non-exempt property click HERE.
Do you qualify for chapter 7?
The Means Test determines whether you qualify for a Ch 7 Bankruptcy. The purpose of the means test is twofold: First, it prevents debtors with large disposable monthly incomes from filing Ch 7 and wiping out all of their debt. Second, it pushes them towards a Chapter 13 Bankruptcy where they could pay back some, if not all of their debts. The Means Test takes a snapshot of your income for the last 6 months, then compares it to the general population within the same general location – usually determined by zip code.
For information on the Means Test and if you qualify for Ch 7 Bankruptcy, click HERE.
Will My Debts Go Away If I File Bankruptcy?
There are three basic types of debts:
- First are dischargeable debts. These go away in bankruptcy and you never have to worry about these again. The most common types of dischargeable debts are credit cards, medical bills, utility bills, payday loans, repossession deficiencies, etc.
- Second are non-dischargeable. These are debts that never go away and will follow you to your grave. For instance, student loans, most taxes and domestic support obligations like child support are non-dischargeable.
- Third are secured debts. These are debts that attach to some type of property, or collateral. In a Ch 7 Bankruptcy you get a choice: You are allowed to keep the property; however, you will have to pay for it. Conversely, you can walk away and not owe a penny. In other words, there is no free lunch. The most common types of secured debts are car loans, mortgages and title loans.
For a brief overview on the three basic types of debts, click HERE.
Chapter 7 vs Chapter 13 Bankruptcy?
For an overview on which type of bankruptcy may be right for you, click HERE. There is no one size fits all answer to this question, so it is best to speak with an attorney about your situation to determine which type of bankruptcy is a better fit.
How Much Does A Chapter 7 Bankruptcy Cost?
If you are considering filing Ch 7 bankruptcy, an important question is how much it costs. Click HERE to see what I charge to file Ch 7. Click HERE to understand why you should beware of low advertised fees.
How To Pay For A Chapter 7 Bankruptcy?
Ch 7 Bankruptcy fees must be paid prior to filing. The attorney fees vary in price depending on the complexity of the case. Click HERE for ideas on how to get money together to file a case.
To speak to a skilled and experienced Kansas Bankruptcy Lawyer about Chapter 7 Bankruptcy, please give us a call at 785-379-3600 for a FREE Consultation over the phone or in person or you can email us now.
