Chapter 7 bankruptcy is liquidation or straight bankruptcy. If you are qualify, you can receive a Chapter 7 discharge every 8 years. If you filed Chapter 7 within the last 8 years, you are eligible to receive a discharge in a Chapter 13 case that is filed at least four years after your Chapter 7 was filed.
The entire Chapter 7 Bankruptcy process takes about 3 to 4 months from start to finish in a normal case.
Filing Chapter 7 invokes the automatic stay and gives you immediate relief from your creditors, stops lawsuits, judgments, and garnishments.
Typical debts that can be discharged are credit cards, old rent bills, personal loans, old cell phone bills, pay day loans, vehicle repossessions, debts from a foreclosure, medical bills, some taxes, as well as numerous other types of debt.
Not all debts are discharged by a Chapter 7 discharge. Certain types of debts are by law not dischargeable under Chapter 7.
It is necessary to evaluate all possible exemptions and transactions to see how Chapter 7 liquidation would affect your particular situation. Chapter 7 is not a viable option if you have non exempt assets, or you conducted certain transactions that could be reversed, or you may be receiving certain types of income in the future.
In order to qualify for Chapter 7 you must pass the means test. The means test divides filers into below median and above median incomes. The means test looks at the filer’s household income for the 6 months prior to filing and compares it to the average for the same size Maryland household in your county.
A debtor that fails the means test for Chapter 7 may be able to file for Chapter 13 instead.