chapter 7 bankruptcy

Chapter 7 is the chapter of the Bankruptcy Code that provides for “liquidation” or elimination of unsecured debt. We all know it as a debt relief process instead of a legal code section.  For most people this is credit card debt, personal loans, medical bills, tolls, payday loans, and other credit that is not secured by property.  Often eliminating debt by filing a Chapter 7 bankruptcy can free up the money a person needs to afford to pay the secured debt they want to keep like vehicles or houses.

The risks in Chapter 7 bankruptcy is that the person might not qualify, might lose property, or might be challenged by a creditor or the bankruptcy trustee.

The power of a Chapter 7 bankruptcy is the permanent elimination of unsecured debt. As with the Chapter 13, it also has the powerful ability to immediately stop legal actions such as repossessions, foreclosures, lawsuits, garnishments and liens. Qualified debt will be eliminated forever. There are several categories of debt that are not eliminated by Chapter 7 such as child support obligations, student loans, criminal restitution, and some taxes. To determine the advantages and disadvantages as well as the timeline of a Chapter 7 for you schedule a free consultation with one of our attorneys.