Bankruptcy – Chapter 7

Chapter 7 (Liquidation Bankruptcy) proceedings involve the complete liquidation of the debtor’s estate. Chapter 7 is available to individuals, viagra generic mind married couples, viagra sale corporations and partnerships. It is commonly used to obtain the discharge of certain debts and allows you to keep only your “exempt” property.

Federal statutes and state laws determine what property is considered “exempt”, but typically include:

  • Furnishings
  •  Vehicles up to a certain amount
  •  Equity in a home
Bankruptcy doesn’t get rid of all debts. Certain types of debts are not dischargeable under chapter 7, even if the debtor receives a discharge.Among those excluded are:

  • Recent back taxes
  •  Debts for alimony
  •  Child Support
  •  Student Loans
  •  Recent large purchases
  • Fines or penalties of government agencies
  •  Fraudulent debts

Chapter 7 Bankruptcy Means Test

Before a debtor may file for Chapter 7 bankruptcy, it is necessary to qualify through a Chapter 7 means test; most people who wish to file for Chapter 7 qualify.
The “Means Test” looks at your income and expenses and determines if you have adequate disposable income to repay creditors all or a portion of your debts. The expenses are established according to I.R.S. guidelines for each metropolitan area of the United States. The first step of the process looks at the average income in the 6 months prior to the filing date. This is done by adding all of your pay stubs or sources of income during that 6 month period and dividing by 6. The second step is to compare this figure to the median income of Florida based on the number in your household. See the Census Bureau Median Family income by family size. If you are below the median income, you qualify for Chapter 7 Bankruptcy. If you exceed the median income, I will review your expenses carefully to see if exceptions may be made to qualify you for the Chapter 7 bankruptcy.

Filing Chapter 7

The process begins with the filing of a petition by the debtor in the federal Bankruptcy Court. Once you have filed the petition, creditors are prevented from trying to collect on your debts, through what is called an “automatic stay”. A few days after filing the petition, the debtor, the creditors and any other parties in interest will receive the Notice of Commencement of the case. The debtor must appear at the “first meeting of creditors” (also called a 341 meeting). The trustee may ask you questions under oath about your property and debts. Creditors have 60 days after the meeting to object to the discharge of a specific debt. If no objections are filed, the court will enter an order granting the “discharge” of all dischargeable debts that existed on the date the petition was filed. If there are objections, the bankruptcy procedure continues through to discharge, less the objected debts. The objections will be resolved by the judge.
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