A Chapter 7 Bankruptcy Case

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A Chapter 7 Bankruptcy Case will eliminate most/all of a client's debt, and will allow the client to obtain a fresh financial start. A Chapter 7 case is a highly effective tool in dealing with burdensome credit card and other unsecured debts such as medical bills and personal loans. A Chapter 7 case is especially helpful when the client cannot pay their present bills and faces the prospect of creditor harassment, collection actions and bad credit. The Chapter 7 case will allow the client to immediately protect themselves from their creditors and obtain legal forgiveness for their debt so that they can obtain a “fresh start” and be able to rebuild their credit. As soon as the case is filed the “automatic stay” protects the client from their creditors and at the end of the case the bankruptcy discharge allows the client to obtain legal forgiveness for their debt. Most clients discharge all their unsecured debt, although clients are able to voluntarily keep of or “reaffirm” certain debts. Most clients keep all of their property including their vehicles, homes and personal possessions as long as they stay current with the payments on these items and do not have too much equity in such property.

Chapter 7 is the most frequently used type of bankruptcy case and is often used by individuals who are overwhelmed by debts - including credit card debt, medical bills, repossession/foreclosure deficiencies or other debt - to eliminate their legal obligation to pay (or to "discharge") such debt. Persons qualifying for Chapter 7 relief need to have average six (6) months gross income that is below a certain level or pass a means test which takes into account the client's expenses in determining if the client qualifies for Chapter 7 relief. A Chapter 7 case like all bankruptcy cases allows a client immediate protection against their creditors with an "automatic stay" (a court order which requires creditors to stop all collection activity and calls). At the end of a Chapter 7 case, which usually takes approximately five (5) months, the client receives a "discharge order" (a court order granting the client legal forgiveness for their debt). Most chapter 7 cases are highly effective in allowing a client to quickly deal with and resolve their problems by eliminating their obligation to pay debt that is beyond their ability to pay. However, a bankruptcy attorney needs to carefully review a client's circumstances with the client to determine that the client does not have issues that may complicate the case, like major assets with significant equity; income that may be too high; alleged “avoidable transfers”; and/or debt taken by the client that may be deemed to be abusive and/or in bad faith. The Law Office of Ronald D. Weiss, P.C. regularly represents its clients in Chapter 7 cases before the United States Bankruptcy Court and can review with you issues relevant to a potential Chapter 7 case.

Please call us at (631) 271-3737, or e-mail us at weiss@ny-bankruptcy.com for a free consultation to discuss such legal options in greater detail.