Friday, October 21, 2011

Boise Idaho Bankruptcy Attorneys - Chapter 7 Lawyers

Chapter 7 Bankruptcy

As Boise Bankruptcy Attorneys, we often get calls form people wondering what all the Chapters of Bankruptcy are and what chapter they might qualify for.  There are many forms of bankruptcy ranging from simple to complex.  Basic bankruptcy is often refered to Chapter 7.  Federal law has codified the various chapters of bankruptcy and the code section refering to "discharge" is Chapter 7.  There are other forms as well, such as business bankruptcy, often called reorganization, farm bankruptcy and Chapter 13 or repayment bankruptcy.

To qualify for Chapter 7 bankruptcy you first must meet a means test.  This looks at your income and determines whether or not you can repay your debts.  If your income falls below the codified level for the number of people in your family you can proceed with Chapter 7.  If your income exceeds the codified level you do not qualify and your only recourse is Chapter 13.

Once it has been determined that you qualify for Chapter 7, you must make an accounting of all your property.  Certain property is exempt, or at least partially exempt.  For example, you have what is known as a homestead exemption which exempts $100,000 of value from your home.  The exempt property is protected from collection by your creditors. 

Most debts are dischargeable including medical bills and credit card bills.  Some debts however, such as student loans, are not dischargeable.  Once you have made an accounting of your debts you will go before the bankruptcy trustee for a debtors examination.  The trustee will question you about your debts and determine if you have given them a complete list of your debts.  The trustee is paid a minimal statutory fee for the examination.  If, however, they are able to uncover debts which you have omitted, they receive a percentage of the value of the revealed debt.  This gives them incentive to look long and hard at what you have reported.  You can also be penalized for omitting debts.  The bankruptcy judge can deny your petition for bankruptcy so it is in your best interest to be thorough in your accounting.

Chapter 7 bankrutpcy is known as a discharge because once you have gone through the steps all your non-exempt debts are absolved.  Basically, a Chapter 7 bankruptcy means that after you qualify for your various exemptions, your income and available property are not enough to cover your debts.

Chapter 7 has a significant impact upon your credit for many years, but if you have found yourself deep in debt and you have no where to turn, a bankruptcy may be what you need to start getting your financial future back on track.  It offers you a clean slate from which you can begin to build your credit again.

If you have found yourself in this situation and you need to talk to a Boise Bankrutpcy Attorney, give us a call, (208) 472-2383 and see what can do for you.

1 comment:

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