Chapter 7

Chapter 7 of the Bankruptcy Code allows a quicker discharge of debts than Chapter 13. The discharge usually is received within a few months from the date of filing.  As with Chapter 13, the filing of your bankruptcy petition stops all debt collection activity.  However, under Chapter 7, unless you work out an agreement with your secured creditors (home, auto, etc.) they may petition the Court to resume collection activity.

You have the right to seek discharge of secured loans, and to surrender the home, auto, or other property securing the debt.  You also may seek to reaffirm the secured debt by means of a reaffirmation agreement.  There are provisions in the Bankruptcy Code that permit you and the lender to reaffirm the terms of the loan so that the debt survives bankruptcy.  These agreements, supplied by the creditor, are called “reaffirmation agreements.”  They must be approved by the Court to become effective.  Because of the consequences of signing reaffirmation agreements, your attorney will counsel you whether the agreement is in your best interests.

The Chapter 7 process does not include a Court supervised repayment plan.  However, all debts, with certain exceptions, are discharged.   The discharge frees you from any legal obligation to pay the debt.  Your attorney will explain which debts may not be dischargeable.

Individuals, partnerships, corporations and other business entities may be able to file under Chapter 7.  They must, however, pass those requirements set forth in the Bankruptcy Code.  Only those debts applicable to the specifically named person or business are discharged by that individual’s or business’s bankruptcy case.

Call Attorney R. Michael Smith for an appointment.  He will carefully discuss your specific situation and possible applications of Bankruptcy law to your circumstances.  He will help you discover which Bankruptcy Chapter will be best for you.