If you or someone you know has fallen on hard times and is unable to pay their debts, one option is to file for Chapter 7 bankruptcy. Also known as liquidation bankruptcy, this financial option is available to individuals and businesses who are unable to make regular monthly payments on their existing debts. Chapter 7 bankruptcy allows a person to get a fresh start by discharging their debts and providing the opportunity to start anew. At Cornwell Law Firm in Duluth, our knowledgeable bankruptcy lawyers have helped many people file for Chapter 7 bankruptcy and are prepared to assist you with your bankruptcy case. To learn more, call or contact our office today to schedule a case evaluation.
Who Qualifies for Chapter 7?
Individuals and businesses who wish to file for Chapter 7 bankruptcy must pass a means test. Either their income must be lower than the median state income level, or their disposable income must be below a certain threshold. Other requirements for Chapter 7 eligibility include not having filed for bankruptcy within a certain number of years prior and completing financial counseling sessions.
How the Process Works
If an individual qualifies for Chapter 7 bankruptcy, debts that can be are paid off during the process, and any remaining unsecured debts will be erased, or discharged, by the court. The Chapter 7 process begins with the filing of a bankruptcy petition with the court. This involves a number of complicated forms that list all property, income, debts, exempt property, and property recently sold or given away prior to the bankruptcy proceeding. Once the court opens the case, an automatic stay is placed on creditors attempting to collect on their debts. This means that creditors are not allowed to proceed with home foreclosure, wage garnishment, repossess property, or engage in other collection efforts.
The next step in the process is the appointment of a bankruptcy trustee who oversees the proceedings. The trustee will organize the creditor claims, check documentation, and oversee any financial transactions that occur during the bankruptcy process. After that, the creditors meeting is scheduled, where the debtor answers questions about their financial situation. Any non-exempt property owned by the debtor may be sold and used to pay off creditor claims, and any property that has been put up as collateral may be collected to pay off those loans. All exempt property gets to be kept by the individual during and after the bankruptcy process.
Once the Chapter 7 proceeding is complete, any remaining unsecured debts are discharged and the debtor can restart their financial life. To learn more about this option and whether it is right for you, talk to our office today.
Call or Contact Cornwell Law Firm
Are you considering filing for bankruptcy in the Duluth area? Call the office or contact us today at Cornwell Law Firm to speak with a highly qualified bankruptcy attorney and schedule a consultation to discuss your legal options.