This page was written, edited, reviewed & approved by Emil J. Fleysher following our comprehensive editorial guidelines. Emil J. Fleysher, the Founding Partner, has 15+ years of legal experience as a bankruptcy attorney. Our last modified date shows when this page was last reviewed.
Chapter 7 bankruptcy can offer a fresh start for individuals struggling with overwhelming debt. It allows you to eliminate most unsecured debts, like credit card debt and medical bills while protecting you from further collection actions.
Fleysher Law Bankruptcy & Debt Attorneys helps you understand the bankruptcy process and how Chapter 7 can benefit you. We guide you through the steps, ensuring you meet all the legal requirements. With our help, you can take control of your financial future and leave behind the stress of debt.
Chapter 7 bankruptcy is a process designed to help people eliminate most types of unsecured debts. This includes debts like credit card debt, medical bills, and personal loans. It works by selling off certain non-exempt debtor's assets to pay unsecured creditors. The remaining eligible debts are then discharged, meaning the debtor is no longer responsible for them.
The main goal of Chapter 7 is to offer a fresh start by eliminating unsecured debts. However, it does not erase all types of debts. For example, child support, tax debts, and secured debts like mortgages and car loans are typically not eliminated. If you qualify for Chapter 7, it’s one of the fastest ways to resolve debt issues and move forward with a clean slate.
To qualify for Chapter 7 bankruptcy, you must meet specific eligibility requirements. First, your income must fall below the median income for your state, according to bankruptcy law. If your income is higher, you may need to pass the means test, which evaluates your ability to repay your debts.
Secured debts, such as mortgages or car loans, are generally not eliminated in Chapter 7. However, unsecured debts like credit card debt and medical bills can be wiped out. Speak with an experienced attorney to see if you qualify. Fleysher Law Bankruptcy & Debt Attorneys can help you determine if Chapter 7 is the best option for you and explain the legal requirements.
The Chapter 7 bankruptcy process involves several steps, starting with filing your petition and ending with the discharge of debts. Some of the key steps in this process are:
The first step in filing Chapter 7 bankruptcy is to submit a petition to the bankruptcy court. This includes detailed information about your debts, income, assets, and creditors owed. You’ll also need to provide financial documents, such as pay stubs and tax returns. Once your petition is filed, you are protected by the automatic stay, which stops creditors from continuing collection efforts, like phone calls and lawsuits.
Filing your petition correctly is vital. Any mistakes or missing information can delay your case. Consult with an attorney to ensure everything is in order before submission.
Once you file your Chapter 7 petition, an automatic stay immediately goes into effect. This legal protection stops creditors from taking further action against you. It halts things like wage garnishments, lawsuits, and collection efforts from unsecured creditors. This gives you relief from the pressure of debt collection and gives you time to work through the bankruptcy process.
However, the automatic stay does not stop certain actions such as child support enforcement or criminal charges. It also does not stop the foreclosure of secured property unless additional steps are taken in court.
After your Chapter 7 petition is filed, the bankruptcy court will appoint a trustee to oversee your case. The trustee’s job is to review your petition, liquidate any non-exempt assets, and distribute the proceeds to your creditors. If there are no assets to sell, the trustee will close the case without liquidation.
The trustee will also hold a meeting with you and your creditors called the 341 hearing. During this meeting, the trustee may ask you questions about your financial situation and your debts. Be honest and cooperative with the trustee to avoid any complications.
The 341 hearing is where you meet with the bankruptcy trustee and your creditors. This hearing is also called the meeting of creditors. During the meeting, the trustee will ask questions about your financial situation and verify the information in your bankruptcy petition.
Most of the time, creditors do not attend this meeting. If they do, they may ask you questions about your debts or assets. The 341 hearing is a vital part of the Chapter 7 bankruptcy process, and attendance is mandatory. Failing to attend could result in delays or even dismissal of your case.
In Chapter 7 bankruptcy, some of your non-exempt assets may be sold or liquidated to pay your unsecured creditors. The trustee will review your assets and determine which, if any, can be sold to cover your debts. Exempt assets, such as a certain amount of equity in your home or a car, are typically protected from liquidation.
If you have secured debts, such as a mortgage or car loan, the trustee may work with secured creditors to determine whether you can keep the property or if it must be returned. Discuss your assets with your attorney to understand what may be at risk in the bankruptcy process.
The final step in Chapter 7 bankruptcy is the discharge of debts. After the trustee completes the liquidation of non-exempt assets and the 341 hearing takes place, the court will issue a bankruptcy discharge. This discharge eliminates most of your unsecured debts, including credit card debt, medical bills, and personal loans.
However, not all debts are discharged. Secured debts, child support, and tax debts are typically not eliminated in Chapter 7. Once your debts are discharged, you are no longer legally required to repay them, and you can begin rebuilding your financial life.
In Chapter 7 bankruptcy, many types of unsecured debts are discharged, meaning you are no longer responsible for paying them. However, not all debts are eligible for discharge.
In Chapter 7 bankruptcy, many types of unsecured debts can be eliminated, meaning you no longer have to pay them. These include credit card debt, medical bills, personal loans, and some utility bills. If these debts are causing you financial stress, Chapter 7 can provide relief by wiping them out.
One of the main benefits of Chapter 7 is that it can give you a fresh start. Once these debts are eliminated, creditors cannot keep asking for payments or take legal action against you. Understand that secured debts (like mortgages or car loans) are not eliminated in Chapter 7. However, unsecured debts, which are typically not tied to any specific property, are the main focus of the bankruptcy discharge. If you have questions about which debts will be discharged, an attorney can help clarify the process and guide you through it.
While Chapter 7 bankruptcy eliminates many unsecured debts, some debts cannot be discharged. These include child support and alimony payments, which you are still required to pay after the bankruptcy. Tax debts may also not be eligible for discharge, depending on how old the debt is and other factors.
Another type of debt that cannot be discharged is student loans unless you can prove that repaying them would cause undue hardship. Secured debts, like a mortgage or car loan, are also not discharged in Chapter 7. If you want to keep the property tied to a secured debt, you must continue to make payments.
Understanding these exceptions is essential, as they will remain your responsibility even after your bankruptcy is complete. If you're unsure about which debts apply to your situation, it's a good idea to talk to a bankruptcy lawyer.
Once your Chapter 7 bankruptcy is completed, you may wonder what happens next. There are a few important things to know about life after bankruptcy, including how it affects your credit and whether you can rebuild. Here's what to expect after your bankruptcy case is closed:
A Chapter 7 bankruptcy will significantly affect your credit score, but remember that it’s not the end of the road. Your credit score may drop, but it can begin to improve over time as you work on rebuilding your credit. Most people who file for Chapter 7 see their credit score drop initially, but after the bankruptcy discharge, they can start fresh.
The bankruptcy will remain on your credit report for up to 10 years, but the effect lessens over time. As you begin to use secured credit cards or take out small loans and pay them off, your score can rise. Start rebuilding as soon as possible to get back on track financially.
Rebuilding your credit after Chapter 7 bankruptcy is possible, but it takes time and effort. The key is to be responsible with your finances. Start by getting a secured credit card. These cards require a deposit, which acts as your credit limit. By using the card and paying it off in full each month, you’ll start building a positive credit history.
Another way to rebuild is by taking out a small loan and making payments on time. Over time, these actions will show lenders that you can manage credit responsibly. You can also monitor your credit report regularly to ensure that there are no errors. Rebuilding credit after bankruptcy is a gradual process, but it’s very possible with the right steps.
In Chapter 7 bankruptcy, you may be able to keep your home and car if you stay current on payments. Secured debts, like mortgages or car loans, are not eliminated in Chapter 7, but you can usually keep your property if you continue to make the required payments.
If you’re behind on payments, the bankruptcy court will work with secured creditors to determine how to handle the situation. In some cases, you might be able to make up for missed payments and keep your property. However, if you’re unable to make payments on your secured property, the lender may choose to repossess your car or foreclose on your home.
Work with a bankruptcy attorney to determine the best way to protect your property during the Chapter 7 process.
How long does a Chapter 7 bankruptcy stay on my credit report?
A Chapter 7 bankruptcy will stay on your credit report for up to 10 years. While it will affect your credit score, the effect will lessen over time as you rebuild your credit through responsible financial actions.
Can I file for Chapter 7 bankruptcy if I have personal injury debts?
Personal injury debts, such as compensation for injury claims, are typically not dischargeable debts in Chapter 7. However, there may be specific circumstances where certain types of debts, like medical bills, can be discharged. Discuss your situation with an attorney to understand what debts can be eliminated.
Do I need to complete credit counseling before filing for Chapter 7?
Yes, federal law requires that you complete credit counseling from an approved credit counseling agency before you can file for Chapter 7 bankruptcy. This counseling will help you understand your options and may also provide alternatives to bankruptcy.
How does a bankruptcy judge decide my case?
The bankruptcy judge reviews your Chapter 7 petition, verifies your dischargeable debts, and ensures that you meet all the eligibility requirements for bankruptcy. The judge also oversees the 341 hearing and makes the final decision on your bankruptcy discharge.
What are dischargeable debts in Chapter 7 bankruptcy?
Dischargeable debts are debts that can be eliminated in Chapter 7 bankruptcy, such as credit card debt, medical bills, and personal loans. Secured debts, like mortgages or car loans, generally cannot be discharged. However, unsecured dischargeable debts will be wiped out, giving you a fresh financial start.
If you’re struggling with overwhelming debt and considering filing for bankruptcy, Fleysher Law Bankruptcy & Debt Attorneys is here to help. We understand how stressful the decision to file bankruptcy can be, and we are dedicated to guiding you through the process. Whether you're facing unsecured debts, like credit card debt, or more complex financial issues, our team is here to provide the legal support you need.
We offer a free consultation to discuss your situation, explain your options, and help you determine whether Chapter 7 bankruptcy is the best choice for you. Filing for bankruptcy can give you the fresh start you need, and we’ll work with you every step of the way to protect your future.
Contact us today, and let us help you regain control of your financial life.
Emil Fleysher is a South Florida attorney dedicated to helping individuals overcome financial hardships. As the founder of the Law Office of Emil Fleysher, P.A., he specializes in bankruptcy, debt settlement, foreclosure defense, and mortgage solutions.
A graduate of Nova Southeastern University Shepard Broad Law School (2009, honors), Emil has a strong commitment to consumer rights and has volunteered over 300 hours with Legal Aid of Broward County. His firm takes a personalized, client-focused approach to debt relief, ensuring individuals understand their options and regain financial stability.
For those facing overwhelming debt or foreclosure, Emil offers free consultations to explore the best solutions.
"*" indicates required fields
