Chapter 7 Bankruptcy Explained

Here in Southern Louisiana, often we get asked about the differences between Chapter 7 and Chapter 13 bankruptcy.

A bankruptcy case filed under Chapter 7 is often called a liquidation. In a Chapter 7 case, in exchange for a complete “discharge” of all of your debts, a Court-appointed bankruptcy trustee will determine if any of your property can be sold for the benefit of your creditors. But don’t worry, in most bankruptcy cases, all of the filer’s property is deemed exempt, which means the trustee cannot touch it and you get to keep the property after your bankruptcy is finalized.

Chapter 7 bankruptcy can relieve you of most of your unsecured debt – that is, debt that isn’t backed up by something physical like your house, car, or boat.

Examples of unsecured debt that can be discharged by Chapter 7 bankruptcy include medical bills, credit card debt, payday loans, and lawsuit judgments.

You cannot, however, get rid of student loans or child support obligations through Chapter 7. If you have either of these types of debt, make sure to mention them when we sit down together. There are some exceptions where student loans are concerned.

The moment Harrington & Myers files your bankruptcy petition, you get an automatic stay – which immediately stops creditor harassment, wage garnishment actions, car repossessions, and IRS tax liens. The silence that follows your bankruptcy filing can be music to your ears.

Many New Orleans area residents are afraid to pursue Chapter 7 bankruptcy protection because they fear losing their homes and cars. Most of the time, this does not happen. We can help you make arrangements to keep your home and car if you can continue making payments.

It sounds like Chapter 7 could help me. What’s next?

Schedule an appointment to talk with us. Gather up the names and addresses of your creditors and how much money you owe to each one, as well as pay stubs showing any current income and information about assets you own, like your house or car.

The first thing we`ll do is sit down and review your debts and assets. You`ll need to provide the names and addresses of your creditors, and the amount you owe to each one. After we settle your fee payment arrangements, we will file a petition for Chapter 7 bankruptcy on your behalf.

We’ll also take care of any necessary paperwork associated with requesting that you be allowed to keep assets like your house or your car.

Once you’ve taken this step, the next step is relax. We’ll be with you every step of the way.