Bankruptcy Basics Week 2: What is Chapter 7?
September 22nd, 2015
Chapter 7 is what most people think of when they think of bankruptcy. Often referred to as “straight bankruptcy,” Chapter 7 allows a debtor to seek release of legal liability for the debts owed as of the date of the bankruptcy filing. As soon as the bankruptcy case is filed, the debtor receives the benefit of the automatic stay. The automatic stay is a powerful federal law which prohibits creditors from collecting on the debts owed for as long as the bankruptcy case is active. At the completion of the case, the debtor will be provided with a discharge order, which is the order signed by the judge that actually releases the legal liability on the debts owed. The most common debts discharged in Chapter 7 are credit cards, medical debts, payday loans, and delinquent utilities. You must make below a certain threshold of income in order to be eligible to file Chapter 7 bankruptcy. We would be happy to schedule you for a free first appointment to evaluate whether you qualify for Chapter 7 bankruptcy relief and if Chapter 7 is a good fit for your circumstances.