A Chapter 7 bankruptcy is a form of bankruptcy that allows individuals and some businesses to discharge most unsecured debts, effectively eliminating the legal obligation to repay them. This process involves a court-appointed trustee who liquidates non-exempt assets to pay creditors, allowing the debtor to retain exempt property.
Debtors can often exempt a significant amount of property, including a portion of their home equity, certain personal property, and specific types of income. Most people can retain their assets with the help of an experienced bankruptcy attorney. A Toms River Chapter 7 bankruptcy lawyer can also ensure that your bankruptcy petition is filed correctly and that you properly claim all applicable exemptions, maximizing your chances of retaining your assets.
The primary goal of a Chapter 7 bankruptcy, often referred to as a liquidation bankruptcy, is to obtain a fresh start by eliminating or discharging certain debts. This means, after filing a Chapter 7 petition, debtors are released from the legal obligation to repay most unsecured debts, such as credit cards, medical bills, and personal loans.
While the term “liquidation” might suggest the loss of all assets, the process actually involves the trustee identifying non-exempt assets, such as property, and selling them to generate funds to distribute to creditors. However, most Chapter 7 cases involve no-asset cases where there are not any non-exempt assets to liquidate.
Creditors cannot continue lawsuits, initiate garnishments, or demand payment until the bankruptcy case is resolved. While Chapter 7 offers a way to discharge debts, not all debts are dischargeable. Examples of debts that are typically not dischargeable include domestic support obligations (child support and alimony), student loans, and certain taxes.
By eliminating eligible debts, Chapter 7 bankruptcy helps debtors regain financial stability and avoid the ongoing pressure of debt collection. Our experienced attorneys in our Toms River office can guide you through the Chapter 7 bankruptcy process and help you navigate all legal procedures involved.
To file for Chapter 7 bankruptcy, you generally need to meet specific requirements related to income and debt, as well as adhere to certain eligibility criteria. Essentially, you will need to pass a means test, demonstrating that your monthly income is below the median income for your household size.
If your income is above the median, you may still qualify if you can demonstrate that, even after accounting for reasonable living expenses, you would not have enough remaining to repay a portion of your debt under a Chapter 7 plan. Our Toms River attorney can review your legal options when filing a Chapter 7 bankruptcy and assist you through all necessary procedures.
To file for a Chapter 7 bankruptcy, you will need to provide income statements, pay stubs, tax returns, bank statements, and details about your assets and liabilities. You will also need to complete a debtor education course after your case is filed and within 60 days of the first meeting of creditors.
A Chapter 7 bankruptcy offers several benefits, primarily focused on debt relief and offering a new financial start. It allows you to discharge most unsecured debts such as credit card debt, medical bills, and personal loans. Additionally, it triggers an automatic stay, halting collection actions like lawsuits, garnishments, and even repossessions. The process is generally faster than Chapter 13, often completed in four months or less.
A Toms River Chapter 7 bankruptcy lawyer can guide you through the process, helping you identify and utilize available exemptions to protect your assets. Our attorneys can provide compassionate, in-depth legal guidance to help you navigate this next stage and pursue a healthier financial future. Call Gillman Capone today for a confidential case review.
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