FAQ

Filing Chapter 7 bankruptcy requires you to list all of your assets as part of your documentation. These assets are considered to be your bankruptcy “estate” which can then be liquidated and the proceeds used to pay off your unsecured debt to creditors. However, many of these assets will be protected by exemption laws. These laws allow certain property to be exempt from liquidation. The majority of Chapter 7 bankruptcy cases result in filers retaining most of their assets/property due to exemption laws. Some assets are protected up to their full value while others may have a specific dollar amount that can be exempted. At The Law Offices of Joshua Cavanaugh, we can help you understand these laws, how they apply to you, and ensure that all of your available exemptions are used in your Chapter 7 case.

To qualify for Chapter 7, you will need to pass a means test that looks at your past six months of income. This is then compared to the median income of a household of your size in the county where you live. If your income is below the median, you pass and need not take any further eligibility test steps. However, if your income is above the median amount, you will need to take additional steps that allow you to take certain deductions that may lower your income to an eligibility level. Our bankruptcy attorney can provide the assistance you need in this matter.

Bankruptcy records are available to the public through court records. However, it is unlikely that friends, coworkers, employers, or others will learn that you filed for bankruptcy unless they take the time to specifically search for such records.

To file for Chapter 7, you will have to complete a court-approved credit counseling course. Once completed, you will be issued a certificate that must be filed with the court along with your other Chapter 7 documents. After your filing is done and before any debts can be discharged by the court, you will have to complete another court-approved course related to debt education. This course teaches you financial management and how to stay out of debt after your bankruptcy has been concluded.WHAT IS THE MAIN DIFFERENCE BETWEEN A CHAPTER 7 AND A CHAPTER 13 BANKRUPTCY?

The main difference is that Chapter 7 is a liquidation process in which your non-exempt property is sold off to pay your creditors while Chapter 13 is a repayment plan of your debt over three to five years. Chapter 7 can generally be accomplished in a matter of months while Chapter 13 takes years. Chapter 7 also has eligibility requirements based on your income. Those who are not eligible to file a Chapter 7 can file a Chapter 13.