There are two types of consumer bankruptcy, Chapter 7 and
Chapter 13.
CHAPTER 7 BANKRUPTCY
Chapter 7 bankruptcy refers to the chapter
of the federal statutes (the Bankruptcy Code) that contains the bankruptcy law. Chapter 7 bankruptcy is sometimes called "straight"
bankruptcy. This bankruptcy cancels most of your debts. In exchange, you might have to surrender some of your property, but this is
not always the case.
Stopping Harassment
Filing any bankruptcy puts into effect something called the "automatic stay." The automatic
stay immediately stops your creditors from trying to collect what you owe them.
Filing Information
Prior to filing a bankruptcy, you
must meet with an approved credit counseling agency no more than 180 days before filing a bankruptcy petition. Our firm has a list
of counseling agencies and most credit counseling can be done via the internet from your home. All Ch. 7 & Ch. 13 Debtors must
also complete a Financial Management Course before they receive a discharge of debts.
A Chapter 7 discharge ends the debtors personal
liability on dischargeable debts. However, some types of debts may not be discharged. Student loans, certain taxes, child support
and alimony claims are some debts that cannot be discharged in bankruptcy. Generally, all of your unsecured debts will be discharged.
Unsecured debts include personal loans and credit cards issued by banks, such as Visa, MasterCard, American Express, or Discover,
and other credit cards used to purchase consumable items such as clothing, food, vacations, etc. Your personal liability for secured
debts will also usually be discharged. Secured debts include those debts where the creditor has a security interest in your property
to guarantee payment. The most common secured debts are mortgages and car loans. However, if you wish to keep the property secured
by the debt, you will have to continue making the regular payment.
What about my property?
Contrary to what you may think, most people
are able to keep their property in a Chapter 7 case. This will depend on the amount of exemptions you are entitled to. Essentially,
an exemption is a certain value of property that you are allowed to keep.
In order to file your bankruptcy, our office needs complete
information about your debts including the creditors name and address, the approximate date the account was opened, the approximate
amount owed, the account number, any co-debtors (anyone other than yourself, or yourself and spouse if filing jointly), and other
information concerning your assets and liabilities. We also must have your most recent pay stubs for the past six months, and you
must have filed all tax returns.
The Spagnola Law Firm is a federally designated debt-relief agency. We help people file for bankruptcy
relief under the Bankruptcy Code.
