Chapter 7

What is Chapter 7 Bankruptcy?

Chapter 7, Title 11, United States Code is the part of the Federal bankruptcy law designed specifically for those in financial difficulties who do not have the ability to repay their existing debts. Chapter 7 Bankruptcy, also called a liquidation or ‘straight’ bankruptcy, is the most common form of bankruptcy in Texas, as well as in the entire country. Each year thousands of Texans are given a fresh start and allowed to move forward with their lives by clearing their debt through Chapter 7 Bankruptcy. In many cases most, if not all, debts are discharged within months of filing a bankruptcy petition.

What types of debt can Chapter 7 Bankruptcy discharge?

Chapter 7 Bankruptcy can be a good option for those under an unmanageable amount of unsecured debt. Unsecured debt can include credit card balances, medical bills, unsecured loans, broken leases, pay day loans and past-due utility bills. In some cases Chapter 7 Bankruptcy may also discharge foreclosure deficiencies, repossession deficiencies, most judgments and even some taxes.

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How does Chapter 7 Bankruptcy work?

Chapter 7 Bankruptcy provides a relatively quick way in which to resolve your debts when you are unable to pay them back over time. Chapter 7 Bankruptcy, unlike Chapter 13, is designed to discharge and eliminate your unmanageable debts quickly and permanently. In a Chapter 7 Bankruptcy the debtor does not set up a plan to pay creditors. Instead, with few exceptions, the debts are eliminated.

In a Chapter 7 Bankruptcy a trustee is appointed by the bankruptcy court to examine your assets. The trustee determines if there is exempt property. There are exemption laws which may allow you to keep certain types of property. In Texas, homestead, wages and vehicles can often be claimed as exempt. The trustee then collects the non-exempt property, liquidates it and distributes the proceeds to your unsecured creditors. Each state allows for debtors to keep essential property, and in most Chapter 7 consumer cases everything is protected and there is no property loss. These are called “no asset” cases. Also, the creditors in your Chapter 7 Bankruptcy are automatically stayed from harassing you. You’ll receive no phone calls and no threatening letters. Once you receive your discharge order, this stay from harassment becomes permanent and your creditors are then forever prohibited from contacting you.

It should be noted that a Chapter 7 Bankruptcy can rarely help with secured debt. A secured creditor has the right to repossess the collateral if you fail to meet your monthly payments. Also, some types of unsecured debt, such as alimony, child support, student loans, criminal fines and some taxes are allowed special treatment and cannot be discharged. A Chapter 7 Bankruptcy will remain on your credit report for 10 years from the date of filing and could result in credit being less available and with less favorable terms.

Is Chapter 7 Bankruptcy right for me?

The answer to this question begins as soon as you walk into our offices. We at the Law Offices of Joe A. Gamez understand that while everyone wishes to repay their creditors, at times unforeseen hardships such as divorce, job loss and medical bills make this wish an impossibility. Our attorneys are some of the most qualified, experienced professionals in the state. We know how to file a Chapter 7 Bankruptcy and we will work with you to help ensure your bankruptcy goes smoothly and your assets are protected. We've helped thousands in San Antonio to gain the maximum benefit from their bankruptcy filing.

When you’re ready to get serious about solving your debt problem call our offices at 210-736-4040.

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