Eugene, OR Chapter 7 Bankruptcy Attorney
As a Lane County bankruptcy attorney, Tom Butcher has helped folks struggling with crippling debt make the best of a bad situation. While bankruptcy may have negative connotations in our culture, it is a necessary part of a healthy economy. Those who find themselves paying off only a fraction of the interest they’re accruing are not in a winnable situation. Bankruptcy provides them with an opportunity to discharge certain debts and get a fresh financial start.
Chapter 7 bankruptcy is one of the most common forms of bankruptcy that individuals and spouses can file under. It allows those who qualify to discharge unsecured debts like medical expenses, credit card bills, and personal loans. It prevents creditors from filing lawsuits against you, garnishing your wages, or placing liens on your property. It prevents creditors from even contacting you while your bankruptcy case is being heard.
Below, we’ll discuss the ins and outs of Chapter 7 bankruptcy and how a Lane County bankruptcy attorney can help you find a way out of a financial black hole.
Chapter 7 Bankruptcy — An Overview
Chapter 7 bankruptcy is also known as liquidation bankruptcy. Essentially, you file a petition with the court stating that you cannot repay the debts you owe. The bankruptcy court looks over your petition and provided that you qualify under the rules of Chapter 7, you can begin the process of discharging unsecured debts. The entire process takes about 90 days from start to finish. Once the bankruptcy is completed, the unsecured debts you owe are discharged meaning you simply no longer owe them.
What Kind of Debts Can I Discharge in Chapter 7?
Chapter 7 bankruptcy is uniquely suited to discharging unsecured debt. This includes, but is not limited to:
● Medical bill debt,
● Credit card debt,
● Personal loans,
● Deficiency balances,
● Court judgments,
● Some types of tax debt,
● And more.
What Kind of Debts Can’t be Discharged in Chapter 7?
Chapter 7 bankruptcy cannot discharge secured debt such as mortgages or car loans. If you file under Chapter 7, you will have to reaffirm the debt in order to keep your home or your car. If you choose to walk away from your mortgage or car loan, you will have to surrender the property, but you won’t owe any more money on it.
Additionally, there are some debts that cannot be discharged by Chapter 7 or any kind of bankruptcy. These include federal student loans (except in rare hardship cases), some taxes, alimony payments, child support payments, and personal injury judgments resulting from a DUI.
How Does Chapter 7 Bankruptcy Help Debtors?
The first thing that you need to be aware of is that as soon as you file for bankruptcy, all creditor actions against you to recover any debt must immediately stop. This means that if the creditor has filed a lawsuit against you, that lawsuit will remain in limbo until your bankruptcy case has been processed. Afterward, the lawsuit will likely be dismissed. Additionally, wage garnishments will stop and so will harassing phone calls. This is known as bankruptcy’s “automatic stay”.
Afterward, you and your bankruptcy attorney will submit all of your current debts to the bankruptcy trustee along with details concerning your estate and assets.
Chapter 7 bankruptcy is known as liquidation bankruptcy because the trustee can liquidate your assets to repay creditors at least a portion of what you owe them. However, it is rare for a trustee to find any property that is both worth liquidating and subject to liquidation. Those filing for bankruptcy are allowed to exempt certain valuable property up to a certain amount. Your bankruptcy attorney can help you protect your property from liquidation.
The Chapter 7 Bankruptcy Process
How does Chapter 7 bankruptcy work? Well, there are several discrete steps in the process, beginning with contacting a bankruptcy attorney. The process is much simpler than other forms of bankruptcy. It is also cheaper and faster. The entire process can be divided into five steps:
- Prior to filing, you must complete a mandatory credit counseling course.
- You file your official bankruptcy forms with the court.
- 30 days after you file, you are required to attend a 341 meeting of creditors. For Chapter 7 filings, creditors rarely show up, but they have the opportunity to contest your filing.
- 60 days after your creditors meeting, you will need to take a mandatory budget counseling course.
- Receive your Chapter 7 bankruptcy discharge at about 90 days after filing.
The Chapter 7 Bankruptcy Means Test
The Chapter 7 means test determines your eligibility to file under Chapter 7. If you make less than the median household income in the State of Oregon, you automatically qualify. If you make more, you will have to pass the Chapter 7 means test. Basically, this considers all of your income against all of your debts and determines whether or not you are capable of repaying. Those who make too much money or have too much disposable income can still file under Chapter 13.
Talk to a Eugene, OR Bankruptcy Lawyer Today
The concept of bankruptcy has been with us for thousands of years. It is even written into the United States Constitution. The Bankruptcy Code gives families and individuals a fresh financial start and a new lease on life. You will be able to eliminate overburdening debt and the tremendous stress that comes with it. You will be in a position to start anew financially.
To learn more about how Chapter 7 bankruptcy can improve your life, please contact Lane County bankruptcy lawyer Tom Butcher today to schedule your free 60-minute in-office strategy session.
The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. Contacting us does not create an attorney-client relationship.
I am a debt relief agency. I help people file for bankruptcy relief under the Bankruptcy Code.