Chapter 7 Bankruptcy
What is a Chapter 7 Bankruptcy?
A Chapter 7 Bankruptcy case or a “liquidation case” may be filed by an individual or a business entity. In a Chapter 7 Bankruptcy case, all of the debtor’s property is collected and valued by the Chapter 7 trustee. Any non-exempt property is sold by the Chapter 7 trustee to pay creditors. After this process is complete, the debtor receives a Chapter 7 discharge, i.e., the debtor will no longer owe creditors anything. Some debts including domestic support obligations and student loans are not eligible for discharge in bankruptcy. A Chapter 7 bankruptcy can be filed once every 8 years.
We at Bankruptcy Professionals, PLLC are experienced in guiding individuals through the process of filing chapter 7 bankruptcy.Let us help you obtain a fresh start.
CH 7 Q&A
Who Qualifies for a Chapter 7 Bankruptcy?
To determine if you qualify for a Chapter 7 Bankruptcy, you need to pass a means test. This test is to make sure Chapter 7 Bankruptcies happen for those who do not have the financial means for a Chapter 13 Bankruptcy instead. This means test compares your income to the median Utah family/individual income of the same size and determines your disposable income found in the Census Bureau of the Department of Justice. If your projected disposable income is less than $100 a month for the next five years, you should be eligible for a Chapter 7 Bankruptcy. You will be required to attend financial/debt counseling as part of the process.
Do I Need an Attorney to File a Chapter 7 Bankruptcy?
Whether or not you need an attorney depends on your situation. Business entities are required to be represented by an attorney, but individuals are not. Navigating the procedural hurdles of bankruptcy is best done by an experienced bankruptcy attorney. If, however, you decide to file a Chapter 7 petition without the advice of an attorney, there is some helpful information available at the Utah Bankruptcy Court’s website http://www.utb.uscourts.gov located under the Unrepresented debtor tab.
What is a Chapter 7 Discharge?
A Chapter 7 Discharge is when individual debtors are no longer held liable for certain debts owed. In a Chapter 7 Bankruptcy, discharges are only available to individuals not corporations. In other words, the collection calls will stop. You will finally have the freedom to answer the phone without worrying that it might be another creditor.
How Long Does it Take to Get a Chapter 7 Discharge?
It usually takes 3-4 months to complete an individual Chapter 7 Case.
Required Documents: When a debtor initiates a bankruptcy case certain documents must be filed:
1. Attorney Certificate
2. Proof of Income
3. Monthly Net Income
4. Anticipated Changes in Income
5. Educational IRA
6. Copy of Most Recent Tax Return, possibly tax returns during pending cases, or three years prior
Utah Courts – Consumer Debt – This website provides ‘Self-Help’ Resources for Consumers, including small claims, debt & debt collection, fraud and identity theft and government & non-profit consumer agencies.
Utah Bankruptcy Courts – This website provides you with great information regarding local opinions, rules, policies and procedures, and guidelines, as well as credit counseling/debtor education. This website can also provide important calendars and official forms for you to look over and complete.
Utah State Legislature – Here you can see the different Tiltles and Judicial Codes for the State of Utah. This website can show you which properties are protected in bankruptcy. The things listed can’t be taken from you during Chapter 7 or Chapter 13 bankruptcies.
*Not all debt can be discharged when filing a Chapter 7 or Chapter 13 Bankruptcy. Some of these non-discharged debts include student loans, criminal fines, child support, recent taxes, and alimony.
If you’re considering filing bankruptcy, first call Utah Attorney Donald S. Reay for a free consultation.
General Bankruptcy Q&A
How Can Filing Bankruptcy Help Me?
Filing bankruptcy may allow you to stop foreclosures or repossessions. It can allow you to challenge creditors accusing you of owing more money than you really do. Filing bankruptcy may allow you to stop wage attachments, debt collection, and similar actions. It can also help you eliminate the requirement to pay most or even all of your debts. Filing bankruptcy can help give you a financially fresh start and a second chance.
What Impact Will Filing Bankruptcy Have on My Spouse?
Your spouse may or may not have to file bankruptcy with you. Obligations are separated into individual and marital. If the debt lies under marital obligations, creditors may be able to go after a spouse. Most find it easier to file a joint bankruptcy.
Do I Need a Lawyer to File Bankruptcy?
You do not need a bankruptcy attorney. However the bankruptcy process is not simple and we highly encourage you to take advantage of our skilled bankruptcy attorneys.
What Are the Benefits of Bankruptcy?
Bankruptcy has many benefits including helping to eliminate creditors and collection calls. It helps make debt easier to manage and gives you a fresh start.
What CAN’T Filing Bankruptcy Do?
Filing bankruptcy cannot solve all your financial problems, and may not be the right step for everyone. Filing bankruptcy cannot dissolve debts that happen after bankruptcy has been filed. Filing bankruptcy cannot protect the co-signers on your debts. Filing bankruptcy cannot discharge child support, alimony, criminal fines, or recent taxes. Finally, filing for bankruptcy cannot eliminate debt from “secured creditors”.
What does a Bankruptcy Trustee Do?
A bankruptcy trustee is appointed by the bankruptcy court to liquidate your eligible property and assets. This person is qualified, impartial, and fair.
Utah Bankruptcy Practice Areas
Be sure to find a lawyer who has proven tor be successful in resolving cases, closing deals, protecting assets, and adding value.
Donald Reay is a knowledgable trial attorneys with experience in probate courts and comprehensive knowledge of probate law in Utah and its unique procedures to both probate and trust disputes.