CHAPTER 7

In the U.S., an individual can file for bankruptcy in two ways. One of the ways of filing for bankruptcy is through Chapter 7 bankruptcy (Under Title 11 of the United States code). This code is also known as the bankruptcy code. Filing for bankruptcy through "Chapter 7" offers you an opportunity to eliminate your outstanding debt in full (with certain exceptions).

Another name given to Chapter 7 bankruptcy is straight bankruptcy, or liquidation bankruptcy. This is because all exempt assets (cash, checking/savings accounts, retirement/401k accounts, injury awards, vehicles, equity in primary residences [depending on state], etc.) are normally protected. It is always important to consult a professional to discuss if you qualify to file for bankruptcy, and if so, if it is the best route since once you file for bankruptcy, you cannot simply terminate the filing.

There may be a lot of benefits from filing for liquidation bankruptcy; however, one must meet some qualifications before successfully filing for it. One of the qualifications is passing the Means test and the Schedule I/J test. If you pass the tests and are considered eligible, you are then allowed to start the process of filing for Chapter 7 bankruptcy. Nassar Law is here to discuss qualification issues and asset protection issues and will recommend the best course of action to follow.

What is not discharged?

Although a majority of the debts are dealt with under this chapter, there are other types of debts that are not. Some of these debts typically include spousal support, child support, and other fines imposed by the court for the commission of a crime. Also, student loans, property taxes, and income taxes are typically not discharged in a bankruptcy.