Clayton Law Offices: Bankruptcy

Chapter 7

The filing of a Chapter 7 Bankruptcy is designed to result in a discharge of most of your debts. A discharge is when you are released from your legal obligation on those debts and are not required to pay on those debts. The goal of filing a Chapter 7 Bankruptcy is to discharge your current debt and to give you a financial fresh start.

There are certain debts that can not be discharged

For a complete list, you should speak with an attorney. However, some more common debts that can not be discharged are:

child support
alimony
taxes or debts owed to the government*
student loans*

A Chapter 7 bankruptcy case is begun by filing a petition with the bankruptcy court. The petition is a detailed description of your assets, liabilities, income, and expenses. In order to ensure all of the assets you own are safe (you keep them) it is important to work with an attorney who is knowledgeable and experienced and can exempt all of your property. Property that is not exempt may be liquidated or sold to pay your creditors. Once your petition is filed, all collection activities must cease. If you have lawsuits pending, or a foreclosure pending everything will be brought to a halt. In most cases, you will not have to appear before a judge or go to court. The only appearance you have to make is before a trustee. Your trustee is a local attorney who is appointed to your case. He or she will ask you questions to ensure that the information you provided on your petition is accurate. Three months after your case has begun you will receive a "discharge" from the court. A discharge rids you of any legal obligation to pay the creditors in your bankruptcy, with the exception of house or car payments if you choose to keep those. * There may be exceptions that would qualify you to receive a discharge on these debts.

Documents Needed

2 years tax returns
6 months proof of income
If employed - paystubs
If self-employed - profit and loss
If retired - statement showing benefits
If unemployed - statement showing benefits
401K/retirement - statement for each
Value of home - appraisal or brokers price opinion or comparative market analysis
Bank - statement for each account
Car registration - if married
Bills including car loan statement and mortgage
Life insurance policy - statement not needed if policy is through employer
Divorce agreement, if divorced

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