Chapter 7 Bankruptcy
Chapter 7 bankruptcy is also known as a Liquidation Plan or a Fresh Start Program.
If someone has large amounts of credit card debt – or unsecured debt – Chapter 7 may be the right choice for you. Under Chapter 7, all non-exempt property is sold to pay creditors and the remaining qualified debt is eliminated – or discharged.
Sounds Simple?
Chapter 7 bankruptcy theoretically seems simple, but there are many factors to consider before filing for bankruptcy. You have to qualify for Chapter 7 bankruptcy, and the 2005 changes to the bankruptcy laws make that more difficult. Not everyone passes the mandated “Means Test” to qualify for Chapter 7. Nor is all debt discharged under Chapter 7. Secured debt like (mortgages and car loans), back taxes, student loans, child support, alimony, and debts incurred from DUI or intentional acts like fraud are not dischargeable.
Automatic Stay Protection
Chapter 7 bankruptcy provides immediate Automatic Stay Protection until your case has been discharged. Dealing with creditor calls, collections, lawsuits, even foreclosure? Filing bankruptcy stops creditor harassment. Stops foreclosure. Stops it all. With foreclosure, the stay is temporary, but if your case allows you to keep your home through exemptions, and your discharge allows you to continue making your mortgage payments, you can keep your home out of foreclosure.
Bankruptcy is a complicated process, and laws vary from state to state. It’s important to speak with a Maryland bankruptcy lawyer to discuss your case.
