CONSUMER BANKRUPTCY

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Chapter 7 is often called a “straight bankruptcy.”  You ask the court to discharge your debts in exchange for giving up your property except for “exempt” property which the law allows you to keep. In most cases, all your property will be exempt and not be affected by your bankruptcy case. You can protect the equity in your home, some cash in checking or savings accounts, a motor vehicle, retirement accounts, jewelry, and many household belongings.  Property that is not exempt is sold, with the money distributed to your creditors.

If you want to keep property that you cannot exempt, like a home with significant equity or a car and you are behind on the mortgage or car loan payments, a Chapter 7 case may not be the right choice for you. That is because Chapter 7 bankruptcy does not eliminate the right of mortgage holders or car loan creditors to take your property to cover your debt. Additionally, if your income is above a certain level defined by law, you may be required to file a Chapter 13 case.

Married couples can file together but are not required to do so. If filing as a couple you double your ability to protect your assets. About sixty percent (60%) of all bankruptcy cases that are filed are Chapter 7 cases.

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