In a Chapter 7 bankruptcy you are able to eliminate your debts and get a “Fresh Start”. Chapter 7 bankruptcy is a liquidation where the trustee collects all of your assets and sells any assets which are not exempt. In most cases, those who file a chapter 7 bankruptcy will have little to no assets that are not exempt, therefore there will be no assets for the trustee to sell.
Certain debts cannot be discharged in a Chapter 7 bankruptcy, such as alimony, child support, fraudulent debts, certain taxes, student loans, and certain items charged. In most Chapter 7 cases, the debtor has large credit card debt and other unsecured bills and very few assets. In the vast majority of cases a Chapter 7 bankruptcy is able to completely eliminate all of these debts.
You may keep certain secured debts such as your car or your furniture or house by reaffirming those debts. To do so, you must sign a voluntary “Reaffirmation Agreement”. If you decide that you want to keep your house or your car or your furniture, and you reaffirm the debt, you cannot bankrupt that debt again for eight years. You will still owe that debt and you must continue to pay it just as you were obligated to continue to pay it before you filed bankruptcy. In a chapter 7 bankruptcy, you may also be able to remove certain judicial liens that were filed against your property; to the extent they impair an exemption of yours.
It is important to note that not everyone can qualify for a chapter 7 bankruptcy and must meet certain criteria before being able to file. If you are considering filing for a chapter 7 bankruptcy, the Foothill Law Group is here to advise you through this entire process. Stop drowning in debt and get the fresh start you desperately need. Contact us today to schedule a free consultation.