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Chapter 7

National statistics show that Chapter 7 cases remain the most common form of bankruptcy filings.  It is often referred to a “straight bankruptcy” or the “liquidation chapter.”  Chapter 7 may be available to married couples (however, just because you are married does NOT mean that both people have to file), individuals, partnerships, and corporations.

A typical case lasts for only a few short months (typically four).  However, the majority of that time is just a waiting period.  A Chapter 7 trustee is appointed to administer a case and determine if there are any Non-Exempt assets that can be liquidated for the benefit of your creditors according to the priorities established by the United States Bankruptcy Code.  If no Non-Exempt assets exist, then the Trustee will declare a case as a “non-asset” one.  Soon after, the Individual debtor will receive a discharge of their debts.

Not everyone qualifies for a Chapter 7.  An individual must satisfy the requirements of a “Means Test.”  In a very simplistic manner, qualifying for a Chapter 7 involves such things as the size of the household, income, and geographical location of the Debtor, and expenses (per IRS guidelines and / or actual expenses.  However, not every debtor must complete the Means Test.  For example, if the majority of debt is non-consumer (think business debt) the Means Test is not required, or, if the household income is below a certain threshold.

There are two types of Chapter 7 cases; one that consists of “consumer debts” and one where debts are primarily business debts.  There are significant differences between the two.  We will be happy to explain the differences to you during your consultation.

It is important to for me to gather information from you so that I can assist you in determining if you qualify for a Chapter 7 and, even if you do, is it the best solution to your problem(s).  This process begins during our initial Consultation.  And, I look forward to meeting with you then.