Chapter 7
Chapter 7, in plain words
Chapter 7 is the bankruptcy most people mean. A trustee looks at what you own and what you owe. Debts the law allows are wiped out, and you keep the property the law protects.
Most cases take a few months from filing to the end. You meet the trustee once, usually by phone or video, and Brigitte is on the line with you.
What goes, what stays
Usually wiped out
Debts with no collateral behind them.
Credit cards
Medical bills
Payday and personal loans
Old utility and phone bills
Usually stays
Debts the law treats differently.
Child support and alimony
Most student loans
Recent taxes
Court fines and restitution
The means test, without the math
Chapter 7 is open to people whose income is low enough. The court compares your household's income over the last six months with the median for a household your size.
If you are under it, you generally qualify. If you are over it, there is a second calculation of what is left after allowed expenses, and Chapter 13 may fit better. Brigitte runs the numbers with you on the first call; you do not need to bring a calculator.
Chapter 7 worries
Do I have to give up my car?
Not always. If the car is paid off or the law protects its value, you may keep it. If you are still paying a loan on it, you can often keep it by staying current.
Will my employer find out?
Not from us, and the court does not notify employers. If your wages are being garnished, though, the garnishment stops once the case is filed, and that is how some employers find out.
Can I file more than once?
Yes, but the law sets waiting periods between Chapter 7 cases. Brigitte checks your history before suggesting anything.