Chapter 7

Effective Debt Solutions

The following is a brief discussion of Chapter 7 bankruptcy. It is for informational purposes only, and it is not in any way intended to give legal advice. To find experienced, qualified legal representation for your bankruptcy case, please contact the Bankruptcy Center of Joplin at 417-623-3771.

Chapter 7 Bankruptcy

Chapter 7 bankruptcy is the most common form of bankruptcy. A Debtor is not eligible to file for relief under Chapter 7 if the Debtor has filed for bankruptcy within the last 8 years and received a discharge.

Debtors are required to obtain a pre-filing credit counseling certificate from an approved credit counseling agency within 180 days prior to filing their petition. This usually takes about two (2) hours and can be done over the phone or on the internet. The Debtor has no liability for debts discharged in a Chapter 7. However, not all debts are dischargeable; this includes but is not limited to certain types of taxes and most student loans.

If a Debtor does not pay a secured creditor, the creditor is entitled to repossess the collateral. However if the Debtor has not signed documents agreeing to be personally liable for the debt, the Debtor is not liable for any deficiency balance owed.

Your Assets and Exemptions

Every case has a Bankruptcy Trustee appointed to gather and sell the Debtor's nonexempt assets and use the proceeds to pay Creditors in accordance with the provisions of the Bankruptcy Code. Accordingly, potential Debtors should realize that the filing of a petition under Chapter 7 may result in the loss of property. Most, but not all cases are what is referred to as a "no asset" case. This means the equity in the Debtor's assets does not exceed the allowable exemptions. Each of the four states (Missouri, Kansas, Oklahoma, and Arkansas) has different exemptions. The exemptions vary greatly from state to state. The Bankruptcy Code allows the Debtor to keep their "exempt" property, but the Trustee will liquidate the Debtor's remaining assets. Call our office to discuss the exemptions available in your jurisdiction.

The Debtor's income level is a factor in determining if he or she is eligible to file a Chapter 7 bankruptcy. If Debtors earn over a certain level, it is presumed they should be in a Chapter 13. Those income levels vary from state to state and are adjusted twice a year.

The Bankruptcy Center of Joplin handles Chapter 7 bankruptcy exclusively. If we determine another chapter is more suitable for you, we will give you the names of local attorneys who can assist you. Call us today at 417-623-3771.

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