Known as straight bankruptcy, the primary purpose of filing Chapter 7 bankruptcy is to have the (debtor’s) debts discharged by liquidating the (debtor’s) assets in order to satisfy the (debtor’s) creditors.
A liquidation proceeding under Chapter 7 is the most common form of bankruptcy. This involves the sale of all the debtor’s assets that are not exempt. Exempt property may include your home, a car, clothing, work-related tools, and basic household items.
As part of Chapter 7 bankruptcy filing, the debtor is required to pass a means test. The bankruptcy discharge relieves the debtor’s after bankruptcy from having to pay many of your pre-bankruptcy debts. Below is a list of what Chapter 7 bankruptcy may or may not get rid of.
After you file chapter 7 and receive a discharge, the following debts may be discharged under the law:
Unsecured debts
Stop foreclosures,
Repossessions,
Garnishments,
Utility shut-offs,
Debt collection activities
After you file chapter 7 and receive a discharge, the following debts will still not be discharged under the law. You may still be responsible to pay:
Most taxes
Student loan obligations
Child support payments
Alimony payments
Fines, penalties, forfeitures, and criminal restitution obligations
Property settlement obligations /liens on property
Other debts that are not listed in your bankruptcy papers
Chapter 7 bankruptcy or any bankruptcy for that matter is considered a very negative event and will have a devastating effect on your credit score. A Chapter 7 bankruptcy filing is noted from the public records and will remain on your credit reports and affect your credit scores for 10 years from the filing date.
Current Scenario: Filed Bankruptcy Chapter 7 and not yet received discharge.
Current Scenario: Filed Bankruptcy Chapter 7 and received the Discharge Order.
Note
Chapter 7 bankruptcy remain in a credit report 10 years from the filing date.
Warning!
Bankruptcy can have serious long-term financial and legal consequences, including loss of your property. You should consider hiring an attorney and carefully consider all of your options before you file. Only an attorney can give you legal advice about what can happen as a result of filing for bankruptcy and what your options are.
