Chapter 7 Bankruptcies
If you think you need to file for bankruptcy, you may be feeling very stressed out. You may be wondering what chapter 7 bankruptcies are and if it is that right option for you. Here is what you should know.
Chapter 7 Bankruptcies vs Chapter 13 Bankruptcies
Many people ask us to explain the differences between a Chapter 7 bankruptcy and a Chapter 13 Bankruptcy. Chapter 7 is the most common form of bankruptcy, whereas Chapter 13 comes into play in cases where people either make too much money to qualify for Chapter 7 or – more commonly – are facing foreclosure and need to protect their home.
Chapter 7 is commonly known as a liquidation bankruptcy and the good news is that most people don’t lose any property. In a Chapter 13 bankruptcy, however, the filer is required to make monthly payments for a period of 3 to 5 years, or until a specified portion of their debt – usually between 5% and 100% – is repaid, depending on their specific circumstances.
Am I a Candidate for Chapter 7 Bankruptcy?
One commonly asked question is, “Am I a good candidate for a Chapter 7 Bankruptcy?” My answer: “The only real way for a lay person to be sure is to consult with a bankruptcy professional.” When I meet with you, we’ll review your specific situation including your assets, debts, income, and expenses. After that’s done, we can determine whether Chapter 7 Bankruptcy is right for you or whether another solution would better meet your needs.
When you file a Chapter 7 Bankruptcy, a person known as a trustee will be assigned to your case. In addition to reviewing your paperwork for accuracy, it is the trustee’s duty to collect any legally permitted assets from you and use them toward paying off your creditors. From your perspective, the good news is that, in most cases, the trustee cannot collect any assets. We call those no-asset cases because the law offers debtors very strong protections that allow you to keep much – if not all – of your property.
In some situations, however, if your exemptions are not applied correctly, the trustee may be able to take your property. That’s why competent legal assistance is essential, and why you should give our office a call if you’re considering bankruptcy.
If you need representation that will help you figure out your bankruptcy, contact the law firm of Cole, Sorrentino, Hurley, Hewner & Gambino for experienced guidance.