Chapter 7 Bankruptcy Explained
Our Nashville Bankruptcy Attorneys help you understand a complicated process and the consequences
Like any type of bankruptcy, proceeding under Chapter 7 has consequences. But it also has benefits to those who are simply overwhelmed with debt. Tennessee citizens can trust The Nevin Law Firm’s Chapter 7 bankruptcy attorneys for informed counsel and aggressive representation. We are here to answer your questions and walk you through every step of the process until you can start fresh and free from debt.
What is Chapter 7 bankruptcy?
Chapter 7 bankruptcy is debt relief without having to repay your non-priority unsecured creditors. It is also known as a “straight bankruptcy” or a “liquidation.” There are no monthly payments like in a Chapter 13 bankruptcy. The petition is prepared by listing all of your debts, assets, income, expenses, and other information regarding your financial affairs.
When you file bankruptcy petition, a trustee is appointed to oversee your case. The bankruptcy trustee’s job is to liquidate your assets to repay your creditors. However, you are able to exempt most, if not all, of your property from being sold. Most consumer bankruptcy cases result in a debtor being able to keep his possessions. The laws regarding exemptions is complicated, but our attorneys have years of experience to advise you of your rights.
Upon receiving your discharge you will not owe your creditors any balances regardless if they receive any distribution from assets or not. There are certain debts that are not eligible for discharge. Those debts are typically student loans, taxes, child support, and alimony to name a few.
Who is eligible for Chapter 7 bankruptcy?
To prevent abuse of the debt relief available under Chapter 7, Bankruptcy law has an income qualification requirement known as the “means test.” Chapter 7 is most appropriate for individuals who are lower income or do not have a regular source of income. The means test takes into account a debtor’s means in comparison to his or her monthly expenses. Additionally, a household must make under a certain income per year in order to qualify for Chapter 7. However, even if the annual income is above the scheduled amount, there are still many deductions, exceptions, and other circumstances that allow someone to still file a chapter 7 bankruptcy. Our experienced bankruptcy attorneys can help you determine whether Chapter 7 is an option, given your financial situation.
What are the advantages to filing for Chapter 7 over Chapter 13?
Under a Chapter 13 bankruptcy a debtor proposes a repayment plan, while under a Chapter 7 bankruptcy, the discharge is comprehensive and fully relieves the debtor from repayment of eligible debts without the need to repay creditors. However, among the disadvantages of Chapter 7 is that there are a limited number of debts that cannot be discharged, such as student loans, taxes, and child support obligations. If these are a major source of your debt, Chapter 13 may be a better option than Chapter 7. We can help you explore your options.
How does Chapter 7 affect assets such as my property, and retirement and savings accounts?
It depends, but many individuals filing for Chapter 7 are able to keep their home and even other personal property, such as automobiles. There are certain exemptions provided under Tennessee law for property. Included among these is a homestead exemption, which allows an individual filing Chapter 7 to exempt a certain dollar amount of their principal residence, depending on marital status and children living in the home. Similar exemptions exist for deposits with certain financial institutions, Social Security benefits, and other benefits that may be applicable, depending on your situation.
Are there any Court appearances?
When a Chapter 7 bankruptcy is filed, a debtor usually only has to attend a Meeting of Creditors. The meeting is at the Bankruptcy Courthouse but it is not in a courtroom, and there is no judge. At the Meeting of Creditors, also known as a 341 hearing, the debtor, the attorney, and the trustee sit down and discuss the case. Creditors are also allowed to appear. Most creditors do not attend, except for car creditors and mortgage creditors. At the meeting, the Trustee will ask a series of questions to check for assets that can be seized and to make sure the debtor qualifies for the discharge.
for answers to your Chapter 7 questions
At The Nevin Law Firm, our bankruptcy practice has helped those seeking relief under Chapter 7 bankruptcy since 1972. We have helped many Tennessee citizens get a fresh start, and we can help you, too. Make the first step and call us today at (615) 244-7708. Our office is conveniently located in downtown Nashville, across from the Old Historic Courthouse, and parking is available for clients. We offer payment plans depending on clients’ circumstances – be sure to ask if you quality.