Frequently Asked Questions about Chapter 7 Bankruptcy

Many people who are unable to pay their debts may be aware that bankruptcy may be able to help them, but are unsure of whether they are good candidates for bankruptcy and how to even begin. The good news is that obtaining relief through the bankruptcy code is often easier than most people think it is and often leaves people in a much better financial situation than they were prior to filing. Below are some answers to some frequently asked question about Chapter 7 bankruptcy, which is the most common type of consumer bankruptcy. For specific information about your case, call a Houston bankruptcy attorney today.

What is Chapter 7 bankruptcy?

Chapter 7 bankruptcy, also known as a liquidation bankruptcy, is a type of court filing in which a debtor’s non-exempt assets are liquidated (sold-off) and the proceeds are used to pay off debtors. Most, if not all, remaining debts will be discharged, meaning that the debtor is under no legal obligation to pay them back.

What kinds of debts can Chapter 7 bankruptcy eliminate?

Chapter 7 bankruptcy can eliminate many different types of debts, including the following:

Can I keep any of my property in a Chapter 7 bankruptcy?

Because bankruptcy involves the liquidation of assets, many potential filers are under the mistaken impression that filing for bankruptcy will leave them penniless, without their important possessions, and destitute. Fortunately, both state and federal law allow for certain exemptions, meaning that people who file for bankruptcy may keep up to a certain value in assets in certain categories, which include real estate, personal property, bank accounts, and work tools, among many others. In many cases, people who file for Chapter 7 are actually able to keep all of their assets and simply have their debts discharged.

Can anyone file for Chapter 7 bankruptcy?

Not anyone can file for Chapter 7 bankruptcy. In order to do so, you must pass the “means test,” which balances you liabilities against your monthly income. This test is dependent on many factors and can be extremely complicated, so people who would like to know if they qualify should talk to a qualified bankruptcy lawyer.

Contact a Houston bankruptcy attorney today to schedule a free case evaluation Chapter 7 bankruptcy can often help people who are experiencing financial difficulty and often results in a significantly better financial outlook shortly after the bankruptcy is filed. To schedule a free consultation with a bankruptcy attorney in Houston, Texas, call the Dove Law Firm today at 832-509-3400.