CHAPTER 7 FAQs

+ What Is Discharge of Debts?

This is the final order for a Chapter 7 bankruptcy proceeding that permanently extinguishes your debt. For Chapter 13, it is the final order after all your payments have been made under your plan. It’s important to speak to an experienced bankruptcy attorney about what debts you may be entitled to discharge.

+ What Are Exempt Assets?

Exempt assets are types of property that will not be liquidated to pay off creditors under Chapter 7. It’s important to speak to a bankruptcy attorney about what assets you may be entitled to keep when you file for Chapter 7.

+ What Is A Reaffirmation Agreement?

This is an agreement that a specific debt will not be discharged in Chapter 7 bankruptcy. In some cases it might allow you to keep your home, furniture or car. It’s important to get advice before entering into a reaffirmation agreement because it’s often possible for an experienced bankruptcy attorney to renegotiate and reduce a debt before it’s reaffirmed.

+ What is redemption?

Under Chapter 7, some secured assets can be purchased by a creditor for their present market value. For example, if $5,000 remains on an appliance loan, but the value of the appliances is only $1,000, you might be able to pay the creditor $1,000 in cash, with the remaining $4,000 in debt discharged. It’s important to get advice from a bankruptcy attorney about debts you owe that might be eligible for redemption.

+ What Are Non-Dischargeable Debts?

You cannot be relieved of non-dischargeable debts under Chapter 7 bankruptcy. Some examples of non-dischargeable debts are:

• Alimony;
• Child Support;
• Some types of property settlements;
• Some types of tax liability and
• Student loans Filing for Chapter 7 may still be helpful even if you have non-dischargeable debts, because dispensing with other debts can leave you with enough money to more easily pay off your non-dischargeable debts. It’s important to speak to a bankruptcy lawyer about your particular situation.

+ Am I Required To List All My Creditors?

One of the requirements for Chapter 7 bankruptcy is full disclosure of all assets and debts. You can’t pick and choose which debts you would like to discharge, the court will take charge of those decisions. It’s important to work with an experienced bankruptcy attorney that can guide you through the process.

+ What Happens At A Meeting Of Creditors?

A meeting of creditors is when you’re asked questions about your case by creditors. It's mandatory, conducted by the Chapter 7 trustee, and is usually short. Your bankruptcy attorney will be with you at the meeting.

+ Can I Transfer Ownership Of My Boat, Antiques, Cars Or Other Valuables To Others Prior To Filing?

It’s not a good idea. Any transfer made within two years of filing for Chapter 7 will be looked at carefully by the bankruptcy trustee. The closer to filing, the less likely it will be considered valid. It’s important to speak to a bankruptcy attorney before transferring any property prior to filing for Chapter 7.

+ Can Creditors Request Non-Dischargeable Status For Their Debt?

All creditors have one hundred days from filing to make this request, but it will only be granted if the debt meets the court’s criteria. Objections to non-dischargeable status are rarely successful. It’s important to speak to an experienced bankruptcy attorney about your options.

+ How Does Chapter 7 Bankruptcy Impact My Credit?

Despite the fact that bankruptcy will remain on your credit report for ten years, most filers are bombarded with offers of new credit even while their case is pending. Low cost financing is usually still available after your debt is discharged. For a fuller understanding of the impact of bankruptcy on your credit, it’s wise to speak to an experienced bankruptcy attorney.

+ What’s The Impact of Chapter 7 Bankruptcy On A Co-Signer?

A non-filing cosigner will still be responsible for the debt, and the creditor will likely go after them. The fact that bankruptcy was filed could also appear on the co-signers credit report. That’s why it’s important to speak to a bankruptcy attorney before filing for Chapter 7.

+ Will My Employer Be Informed That I Filed For Bankruptcy?

Your current employer will not be notified as part of the bankruptcy process, but future employers that review a credit report will be aware of it. That’s why it’s important to discuss all aspects of bankruptcy with a bankruptcy lawyer if you’re considering filing for Chapter 7.

+ How Does Bankruptcy Impact Employment and Student Loans?

There are laws in place to protect people from discrimination due to filing for bankruptcy that prohibit employers and student loan providers from considering bankruptcy.

+ Can You File For Bankruptcy During A Divorce?

Yes, but it’s important to work closely with a matrimonial attorney and a bankruptcy attorney because this type of bankruptcy can be complicated.