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Bankruptcy Law Blog

Friday, October 30, 2015

Basics of Chapter 7 Bankruptcy

What is Chapter 7 Bankruptcy and how does it work?

If you are overwhelmed by debt, you might be considering bankruptcy as a way out.  Chapter 7 bankruptcy can provide you with a fresh start if you are eligible. Our attorneys regularly determine if clients are eligible and assist them in the Chapter 7 bankruptcy process from inception to conclusion.

In order to be eligible for Chapter 7 bankruptcy, you must pass the means test.  This means that your income must be lower than the median monthly income in your state.  There are a number of exceptions to this rule under which you might also be able to qualify. 

If you pass the means test or fall into one of the exceptions, the Chapter 7 process requires that all of your assets be sold and that the proceeds from those assets be used to pay creditors in a specified manner. The process begins by filing a Chapter 7 bankruptcy petition with the bankruptcy court. 

As a debtor, you must disclose all of your financial information, including a detailed list of your assets and liabilities as well as your income and expenses. At this point, the automatic stay kicks in. The automatic stay stops most collection efforts by creditors.  Within 40 days of the submission, the court appointed bankruptcy trustee must hold a meeting of creditors. You must be present at this meeting, where the trustee and any creditors who attend will question you under oath. The trustee has 10 days from this meeting to decide whether to accept the case or find it to be abuse.

If the case is accepted, all of your assets, except exempt property, will be liquidated and used to pay your creditors. After the bankruptcy, all of your debts will be discharged, giving the debtor the fresh start you were looking for.  There are some debts that are non-dischargeable, such as tax debts and child support payments. You will still be responsible for these, even after the bankruptcy process has been completed.

The attorneys at Padgett and Robertson have extensive experience representing individuals in Chapter 7 bankruptcy cases.  If you are in the Mobile area contact us today at (251) 342-0264 for a free consultation. 


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Padgett and Robertson assist clients with Bankruptcy, Personal Bankruptcy, Consumer Bankruptcy, Chapter 7 Bankruptcy, Chapter 13 Bankruptcy and The New Bankruptcy Law in Mobile, Alabama and throughout southern Alabama. Alabama State Bar Association Regulations require the following: "No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers." 11 U.S.C. 528 of the U.S. Bankruptcy Code requires the following: "We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.”



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| Phone: 251-342-0264

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