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What Is Chapter 7?

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.

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Why are you considering bankruptcy?

Garnishment
Creditor Harassment
Repossession
Foreclosure
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Credit Cards / Store Cards
Personal Loans
Child Support
Student Loans
Car Loans
Income Taxes
Payday Loans
Medical/Dental/Hospital Bills
Past Due Mortgage Bills
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