Chapter 7 Bankruptcy | Andres Montejo Law
The most common type of bankruptcy is Chapter 7 bankruptcies. Individuals that file under this bankruptcy it would be called a consumer Chapter 7 bankruptcy but if a business files under this it would be called business Chapter 7.
Chapter 7 are liquidation bankruptcies in which the debtor’s property will have to be surrendered to a bankruptcy trustee in order to pay off debts from creditors. Creditors will receive a portion of their claim and the balance of the debtors loans cannot be collected. Some property could be exempt from from being seized, for example property needed for work such as vehicles, tools, house furniture, your clothes and the family home. Penalties will be given to creditors who do seek to collect debts that have been discharged.
Are you eligible for Chapter 7 Bankruptcy?
In order to be eligible to file for Chapter 7 bankruptcy, your income cannot surpass a certain level, if it does then you must take a means test. If the court believes you are trying to cheat your creditors then they court will dismiss your case. If you are able to fund a Chapter 13 repayment plan the judge can dismiss your case as well. Disabled veterans who acquire debt during active duty and people whose debts predominantly come from business operations are eligible for Chapter 7 Bankruptcy.
Debts that cannot be eliminated through Chapter 7:
While Chapter 7 bankruptcy may cover unsecured loans, it will not cover child support, alimony payments, due taxes, and most student loans. However, student loans may be dischargeable.
South Florida Bankruptcy Law Center of Andres Montejo
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