Chapter 7 Bankruptcy in Nashville
What is Chapter 7?
Are you faced will bills you can no longer afford to pay? Are you paying off one credit card with another? Have you lost your job or have unexpectedly high debts due to medical bills, divorce or facing repossession? If so, you should speak to an experienced attorney at Cain & Associates, PLLC to discuss your financial future. We offer a free consultation to answer all your questions and explain what your legal options are that could help you get out of debt once and for all through Chapter 7 bankruptcy.
Chapter 7 bankruptcy protection was established by Congress as a legal method to provide those individuals of limited means to eliminate their unsecured debts, end the collection calls and provide them with a fresh start. You may worry that bankruptcy could affect your credit history but if you are already behind on your bills or are facing lawsuits, collections and wage garnishment, your credit is already badly damaged. This type of bankruptcy normally discharges (eliminates) all of your unsecured debts and can allow you to rebuild your credit over time without any unpaid debts on your record.
Qualifying for Chapter 7
Under U.S.C. §§ 101(41), 109(b) it states that to be eligible for Chapter you can be an individual, a partner of a business, or a corporation business entity. A discharge of debt however, is only available to individual applicants. Since the new laws enacted in 2005 by President Bush, every applicant must fill pass the means test that calculates your current monthly income and compares it to the median income of other Tennessee residents. As long as your income does not exceed the median income, you will qualify for Chapter 7. The amount of debt you have does not have any impact on your eligibility. You cannot file however in the 180 day period after filing for a prior bankruptcy which was denied because you failed to meet the requirements. All applicants must go through mandatory credit counseling at within 180 days before filing their petition.
How does Chapter 7 work?
When filling out bankruptcy paperwork for Chapter 7 you will be asked to include a list of assets and debts, a schedule of your current income and expenditures, a statement of your financial affairs and a schedule of executor contracts and unexpired leases. The courts may also ask for your most recent tax returns or for a few years prior, since your bankruptcy case has begun. For husband and wife applicants, if one spouse is solely responsible for the debt they can file independently, otherwise you can file a joint petition.
There are court fees for filing Chapter 7 and failure to pay the fees on time can result in a complete dismissal of your petition. If you are under extreme financial hardship and cannot afford the filing fee, talk to Attorney Cain about your possible options, he may be able to have the fee requirements waived for your case. Married applicants that are filing independently will still need to get information from their spouse and include it in their petition.
When filing for Chapter 7 you will be able to have certain exemptions and protect some of your property and assets from liquidation, your home and car for example. It is vital that you consult with your attorney prior to filing and find out what is exempt and what is not. As soon as the bankruptcy petition has been filed, your creditors will be notified. Filing bankruptcy puts an “Automatic Stay” on wage garnishment, creditor harassment and all collection motions against the applicant. As long as the automatic stay is in effect, it will protect you and creditors are prohibited from contacting you, pursuing lawsuits, or even talking to your friends and family.
Is Chapter 7 right for you?
After submitting all your unsecured debts to the court you will need to make one appearance that allows your creditors to challenge your inability to pay. Once done, the court ordinarily then discharges all your debts and you will be free to start fresh and begin building your financial future. If you have significant assets or own property that the court could sell to repay your debt, you may not want the file this type of bankruptcy. We can discuss your other options if this is the case. There are some debts that are not dischargeable with Chapter 7 bankruptcy including:
- All debts not listed on your bankruptcy petition
- Most student loans
- Taxes (State, Federal and Local)
- Child support and alimony
- Government fees and fines
- Court fees
- DUI debt
- Fraud Debt
The debts that are eligible for discharge with Chapter 7 will be completely eliminated and you will not be legally liable for repayment. Creditors will also not be permitted to contact you or collect that forgive debt. The discharge with this type of bankruptcy is very timely and happens in some cases only 4 months after filing, giving the applicant quick financial relief. To find out more about Chapter 7 bankruptcy contact Attorney Cain and his associates and receive a free consultation.