Chapter 7 Gives Residents a Fresh Start
Filing under Chapter 7 represents a fresh financial start for the petitioner, more than any other chapter in the U.S. Bankruptcy Code. Chapter 7 is known as the “Liquidation Bankruptcy” – the nonexempt assets of the debtor are sold off, or liquidated, and distributed to creditors (assuming there is something to be distributed). The debtor is discharged of any obligation to pay the remaining debts. There are some exceptions, though, such as current child support obligations and spousal support (alimony), both of which are nondischargeable debts in bankruptcy proceedings. When deciding which chapter to file you may notice there are a number of different options mentioned online. Some of these can include Chapter 7, 11, 13, and Chapter 20.
What Will Chapter 7 Do for You?
- You’ll get immediate debt relief.
- There are no debt limits to impede your complete discharge.
- Creditor harassment ends! Answer the telephone and open your mail again without fear of aggressive actions by collection agencies.
- Garnishment of your bank accounts and wages will stop.
- All repossession actions will cease.
- All foreclosure actions will stop.
- Civil lawsuits to collect or enforce a debt will end.
- You will keep your exempt property, which is most of what you own, if not everything.
- Your post-petition earnings will be free and clear of discharged obligations.
- You will not have to prepare and submit a repayment plan to the court.
- You will probably get a discharge within 90 days of filing.
- Unpaid medical bills will be discharged.
- Attorneys fees are typically less than with other bankruptcy chapters.
- Your unsecured debts will be eliminated.
- You will never have to repay discharged debts, such as payday loans, credit card debts, repossession deficiency balances, most judgments, automobile loans, and certain tax obligations.
- You will have a better life and your family will have a better financial future.
Who Can File for Bankruptcy Protection Under Chapter 7?
An individual, corporation, limited liability company, or partnership can file a petition for bankruptcy relief under Chapter 7. Both husband and wife may file a joint petition or one spouse may file individually.
The Chapter 7 bankruptcy petitioner must also satisfy the following requirements:
- Must have resided in Arizona for the greater part of the 180 days preceding the Chapter 7 filing (that is, petitioner is at least a 90-day resident of Arizona).
- Must be financially eligible for a Chapter 7 filing under the Means Test.
- Within 180 days before filing, must have participated in credit counseling from an approved nonprofit agency, the official credit counseling certificate must be filed with the petition.
How Does a Chapter 7 Discharge Free You from Debts?
As you will discuss with your attorney in a Pew Law Center bankruptcy, the discharge of debts is the goal of an individual who files for bankruptcy relief under Chapter 7. While the individual debtor keeps his or her exempt property, the discharge relieves the debtor of any legal obligation to pay back most or all of the debts – discharged debts are wiped out!
The Chapter 7 bankruptcy procedure may be completed in several months and is the swiftest, least complicated form of relief available when compared to Chapter 13 individual debt adjustment and Chapter 11 reorganization, both of which involve court-approved monthly payment plans that can continue for several years.
When the debtor is not an individual, but is a partnership, corporation, or limited liability company, a discharge is not available. Instead, the bankruptcy case is closed following the dissolution of the business organization.
Learn more about the Pew Law Center and Chapter 7.
If you are contemplating filing for bankruptcy in Phoenix, the Pew Law Center, PLLC, provides personalized service when you need it most. We have helped more than 2,000 area residents eliminate over $100 Million in debt through the filing of Chapter 7, Chapter 11, and Chapter 13 bankruptcies.
Contact the Pew Law Center
For more information about the Pew Law Center, contact our offices to schedule a FREE VIP Bankruptcy Consultation. When you meet with us, we listen to your problems and take the time to understand all of your concerns. After we’ve had an opportunity to review your financial situation, we will clearly identify your debt relief options. From there, we will plan the best strategy based on the most pressing matters specific to your financial situation, including creditor lawsuits, home foreclosure, car repossession, and creditor harassment.
Call us at (480) 745-1770 today and speak with a friendly representative of our legal team.