Chapter 7 bankruptcy is liquidation bankruptcy. Those who are eligible can receive a Chapter 7 discharge every 8 years. The entire Chapter 7 Bankruptcy process takes about 3 to 4 months from start to finish in a typical case.
Filing Chapter 7 invokes the automatic stay and gives you immediate relief from your creditors, stops lawsuits, and wage 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, as well as numerous other types of debt.
Chapter 7 does require financial eligibility, and there are also asset liquidation considerations. You may need to seek relief under a different Chapter if you are ineligible for 7 due to income testing and asset liquidation considerations. Also, not all types of debt can be discharged in Chapter 7. Chapter 13 offers a wider range of debts that can be discharged.
Chapter 7 is means tested, therefore your income and assets affect whether you are eligible for Chapter 7. The means test divides filers into below median and above median incomes. A debtor that fails the means test for Chapter 7 can usually file Chapter 13 instead. Chapter 13 bankruptcy is an alternative for those who do not qualify for chapter 7 bankruptcy.
Filing for bankruptcy is a serious legal proceeding that can severely affect your financial life and overall well being. People forget it’s an actual legal proceeding with a judge and courtroom assigned to each and every case and and mistakenly think it’s ok to take a chance on their attorney, but you shouldn’t compromise on representation in any legal proceeding.
Technically, any attorney could handle your case, but it is not a good idea just to get any lawyer to represent you in legal court proceedings. You should make sure you are represented in court with someone who can successfully advocate on your behalf in a legal process.