The Law Office of Brian R. Lewis is ready to help you through the process of Chapter 7 bankruptcy. We can answer your questions, offer suggestions, and make it easier to begin the next financial phase of your life.
Laws vary a bit from state to state when it comes to filing bankruptcy. It is best to choose a lawyer familiar with the laws in your state so the information you receive pertains to your local laws. The Law Office of Brian R. Lewis is familiar with filing for bankruptcy in Massachusetts and is ready to discuss your specific circumstances before moving forward with a filing.
There are several things you need to know about Chapter 7 bankruptcy before filing, including:
• Chapter 7 is the most common type of bankruptcy
• Chapter 7 allows for the liquidation of assets
• Chapter 7 makes it possible to keep your home, vehicle, and other personal belongings
• All dischargeable debts are eliminated
• Debtors must meet household income limits, so not everyone qualifies
• Debtors must reside in or own a business in the state in which they file
• Debtors must have no previous bankruptcy filings dismissed within the federally mandated time frame
• Debtors must have no previous Chapter 7 filing within the last eight years
In addition to these restrictions and regulations, individuals must also pass the Means Test. This new rule was enacted in 2005 and is used to determine if the debtor’s average monthly income at or less than the median income for a family of comparable size in Massachusetts for the six month period prior to filing.
If the debtor’s household income exceeds the median family income, further analysis is required. Living expenses are calculated to determine eligibility for Chapter 7 bankruptcy. If a debtor does not qualify based on household income and expenses, he or she will need to file for Chapter 13 bankruptcy instead.
Situations in which a person or business has accumulated substantial debt, but is no longer able to afford repayment options and who lack sufficient assets should consider a Chapter 7 filing. Chapter 7 bankruptcy might be appropriate for:
Chapter 7 bankruptcy begins with the filing of the bankruptcy petition with the court. The petition includes:
The above list includes requirements for both individuals and businesses. Individual consumers have a few additional requirements. The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) instituted a requirement that all individuals filing for Chapter 7 bankruptcy must complete a single session credit counseling program. It is important for individuals to realize this is not a punishment. The counseling session is simple and it is designed to help you plan for your financial future.
Individuals must also complete an approved financial management course while their bankruptcy case is pending. Proof of completion must be filed with the court prior to receiving final discharge.
Once you file the petition for Chapter 7 bankruptcy you receive an “automatic stay.” This ends all direct contact with your creditors. Once the stay is enacted, the harassing phone calls cease and debt relief begins. Creditors are legally prevented from initiating lawsuits, garnishing wages, taking property, or taking any action without the permission of the court.
After your bankruptcy petition is filed, notice is sent to creditors listed on the petition. A meeting with these creditors is scheduled within 20 to 40 days of filing. This meeting typically takes no more than 10 minutes and requires you to answer, under oath, questions about the financial information listed in your petition. Your bankruptcy attorney is present during the meeting, as is the court-appointed trustee.
Upon filing, the court appoints a trustee to oversee your case. His or her role is to determine if there are any non-exempt assets. If non-exempt assets are found, the trustee sells them to increase the amount paid to creditors. If no assets are available for liquidation, the trustee files a “no asset” report with the court requesting all unsecured debts be forgiven.
Discharge of debt occurs when a legal order is given that you no longer owe money to your creditors. Following the creditor’s meeting, creditors have 60 days to challenge the discharge of a particular debt. Only under specific, limited circumstances can creditors challenge the discharge of a debt.
If no challenges are made, the Chapter 7 bankruptcy process typically takes about four months from petition filing to complete discharge. Remember, not all debts qualify for discharge in a Chapter 7 bankruptcy. Non-dischargeable debts include:
Filing for Chapter 7 bankruptcy is a difficult decision. If you qualify, the process can be difficult and confusing. The Law Office of Brian R. Lewis is prepared to help you determine your next step. We offer each client a free initial consultation in which we discuss your bankruptcy options and help you determine if Chapter 7 is the right path for you.
Your financial future does not need to hang in limbo for another day. Contact the Law Office of Brian R. Lewis for more information about filing for bankruptcy.