No one’s bucket list includes filing for bankruptcy. It’s a jarring experience that can cause feelings of doubt, failure, and remorse. However, in some cases, it’s the best option and affords people the opportunity to get back on their feet.
If done correctly, filing for bankruptcy can be the first step on the road to redemption and prosperity. After all, it’s not about the hits we sustain, it’s about how well we recover from them. But how do you make sure you’re filing correctly, especially when you’re in such a distraught state of mind?
The good news is, you’re not alone, and there’s valuable professional help out there. If you’re thinking about filing for a Chapter 7 discharge, you need to educate yourself. Check out these common questions regarding filing for a Chapter 7 the right way.
What is Chapter 7 Discharge?
Chapter 7 discharge orders creditors to cease their attempts to collect from the debtor, and releases the debtor from all dischargeable debts. It is important to note that some debts are not dischargeable. The debtor is still responsible for non-dischargeable debts.
Who is Not Eligible for Chapter 7 Discharge?
The following circumstances affect individuals’ eligibility for debt discharge:
- The debtor is not an individual
- Those who have been granted a discharge in a Chapter 7 case filed within the past eight years.
- Those who conceal, transfer, or destroy their property with the intent to defraud their creditors or the trustee in a Chapter 7 case.
- Anyone found destroying, falsifying, or concealing records of their financial condition or business transactions
- Those who fail to adequately explain any loss or deficiency of their assets
- Those who have been granted a discharge in a Chapter 13 case filed within the last six years, (certain exemptions apply)
- Those who file a waiver of discharge in their Chapter 7 case that is approved by the court
- Those who refuse to answer questions or obey orders of the bankruptcy court, either in their case or in the case of a relative, business associate, or corporation
- Those who make false statements or claims in their Chapter 7 case, or whoever withholds recorded information from the trustee in the case
Will You Lose all of Your Possessions if You File for Chapter 7?
Certain properties are declared exempt under federal and state law. Debtors are only entitled to unmortgaged, exempt property.
What is a Trustee in a Chapter 7 Discharge Case?
The trustee is an officer of the court, appointed to gather the debtor’s nonexempt property, turn it into cash, and pay the money out to the appropriate creditors. The trustee also has administrative duties throughout the case and oversees the debtor fulfilling their court-mandated duties.
What are Creditors Entitled to?
Creditors are entitled to the mortgaged possessions of debtors. Any debtor’s possession that is nonexempt is subject to foreclosure and repossession. Creditors must prove the validity of the mortgage and obtain a court order before repossessing or foreclosing any property.
Professional Help Goes a Long Way
As you can see, filing for a Chapter 7 discharge comes with many obstacles and questions. Obtaining legal counsel can turn Chapter 7 from a nightmare, into a relatively painless process that expediently gets you to the next stage of your life.
Don’t wallow in debt for the rest of your life. Find out if filing for Chapter 7 today is in your best interest. The future is bright, you just have to take action!