What is Chapter 7 Bankruptcy?
The Law Offices of W. George Senft specializes in Chapter 7 Bankruptcy Law in Portland, OR. A Chapter 7 Bankruptcy will wipe out your unsecured debts.
- Credit card debts.
- Medical bills.
- Deficiency balances related to repossessions.
- Debts related to foreclosure proceedings.
- Income taxes (under certain circumstances).
- Liabilities like payday loans or utility bills.
Some Debts Survive Chapter 7 Bankruptcies
Some debts cannot be eliminated by the filing of a Chapter 7 Bankruptcy. These may include spousal and child support obligations, debts arising from fraud, false pretenses, or from driving under the influence of intoxicants. You should contact a bankruptcy lawyer to determine whether your debts can be discharged in a bankruptcy.
Wage Garnishments and Foreclosures – Chapter 7
Upon the filing of a Chapter 7 Bankruptcy, creditors must cease garnishing your wages and temporarily halt foreclosure proceedings. To permanently stop a foreclosure proceeding and save your home, you have to file a Chapter 13 Bankruptcy. Contact a bankruptcy attorney to review your situation and to determine whether a Chapter 7 or a Chapter 13 bankruptcy fits your needs.
Chapter 7 Bankruptcy and the Means Test
Chapter 7 Bankruptcy is filed by both individuals and corporations. The 2005 Bankruptcy Act Means Test determines your Chapter 7 filing eligibility. This is done by comparing your average income over a six-month period to the median income of the state. If your average income exceeds the median income then you file a Chapter 13 Bankruptcy.
May I Keep My Assets in a Chapter 7 Bankruptcy?
Chapter 7 Bankruptcies are also referred to as “Liquidation”. The Chapter 7 trustee may take non-exempt assets, sell them and disperse the sales proceeds to your creditors. However, most cases are no-asset cases. That means that your assets are exempt and the bankruptcy trustee will not take them. In the unlikely event that you own non-exempt assets, skilled pre-bankruptcy counseling can turn your asset case into a no-asset case. Do not sell, give away of transfer your assets before the filing of a bankruptcy. The bankruptcy trustee has the power to reverse the transfer. In the worst case scenario, you will not receive a discharge.
I Am Making Car Loan Payments – Can I Keep My Car?
As a general rule: if the equity in your car is below a certain threshold, you make your car loan payments, you can keep your vehicle after filing a bankruptcy. Reaffirming the car loan is required.
Mortgage Payments – Can I Keep My Home?
If the equity in your residence is below a certain threshold and if you are current on your mortgage payments, you may keep your home in a bankruptcy.
Credit Counseling and Debtor Education
Section 109 of the Bankruptcy Code states mandatory participation in credit counseling and debtor education course.
I Previously Filed a Bankruptcy, Can I File Again?
If you have received a discharge in a Chapter 7 Bankruptcy then you have to wait eight years before you qualify for a discharge in a subsequent Chapter 7 bankruptcy. The eight-year period starts running with the filing date of the previous bankruptcy. To receive a discharge in a subsequent Chapter 13 bankruptcy, four years have to be between the filing dates.
However, you can file a Chapter 13 bankruptcy sooner if you do not need a discharge. For example, if you want to stop a foreclosure to have more time to catch up with mortgage arrears.