Breakdown of Chapter 7

Unfortunately for many people, the word “bankruptcy” evokes negative emotions. When a person has an overwhelming amount of debt and is unable to make necessary payments, they don’t want to consider bankruptcy as an option due to its bad reputation. People need to educate themselves, however, on the positive aspects of bankruptcy, and how it can help them receive the fresh start they need. Bankruptcy has the power to eliminate debts and lower payments, and it doesn’t have to mean you lose any of your belongings in the process. If you’re unfamiliar with bankruptcy, it may be overwhelming at first, as there are many different types of bankruptcy. Chapter 7 is one of those types, and also one of the most commonly used. If you don’t know much about Chapter 7 bankruptcy, here is a brief breakdown:

  1. Know that it’s a marathon, not a sprint. The typical Chapter 7 filing process, on average, takes about four months. With Richard Banks & Associates, we will be with you every step of the way to make sure you are well cared for throughout the process. We understand that your situation is urgent, and we will work through the process of bankruptcy with you as quickly and efficiently as possible. The advantage to Chapter 7 bankruptcy is that it is known as a “liquidation” form of bankruptcy, meaning that some of your debts can be eliminated.

  2. The process takes work. Initially, when filing for Chapter 7 bankruptcy, you will have to submit an application and petition to the court, as well as take something called a “means” test. We will assist you throughout this process. Your paperwork will need to include a list of your debts, property, and some of your recent financial transactions. The means test will include information about your current income in regards to the median income in the state you reside in.

  3. Your property can be saved. In Chapter 7 bankruptcy, you are relieved from creditor harassment and threats of your property being repossessed. The courts will address your creditors notifying them of your bankruptcy filings, which will put an immediate halt to creditors known as an “automatic stay.” The stay means creditors will not contact you, and your home and other property will be safe from repossession. Most people who file for Chapter 7 bankruptcy get to keep most of their property, as most property is covered with exemption.

At Richard Banks and Associates, we want you to know that we are here for you during your tough financial time. Bankruptcy doesn’t have to be an intimidating concept! If you and your family are drowning in debt, call us for a free consultation. We would love to meet with you! Give us a call at 423-244-0009.