What Is Chapter 7?
By Jay Fleischman, New York Bankruptcy Lawyer on Jan 29, 2007 in Chapter 7 Bankruptcy
There are two different types of bankruptcy cases that are usually used by people who need help ending their bill problems - Chapter 7 and Chapter 13. Chapter 7 is designed for individuals (and married couples) who can’t pay their bills. The typical Chapter 7 client is someone whose income minus their regular average monthly expenses (not including debt payment) yields no money left over. For people with household income above the median, Chapter 7 would be appropriate where average income over the past six months (called “current monthly income”) minus expense allowances yields an amount that falls within certain guidelines.
Under Chapter 7, a trustee takes control of all property that is not specifically exempt; you get to keep many types of property because the law lets you keep it. In return, the court allows you to wipe out many types of debts. Generally, Chapter 7 bankruptcy lets you wipe out debts from:
- credit cards
- store cards
- medical and dental bills
- unsecured personal loans
- certain taxes
There are other types of debts that may be able to be discharged (wiped out) in Chapter 7 bankruptcy as well. It’s useful to realize that the vast majority of people who file Chapter 7 bankruptcy get to keep all of their personal belongings - in some states, people who file Chapter 7 may also be able to keep a home and a car. You should always talk with an experienced bankruptcy lawyer when making a decision to file Chapter 7.
Technorati Tags: bankruptcy, chapter 7, chapter 13, exempt, discharge, credit cards
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