Monday, January 18, 2010

What is a Chapter 7 Bankruptcy Case?

Most people talk about Chapter 7 as a “total liquidation.”  People believe that they will lose all their property in exchange for wiping out all their debt.  Very few people actually lose any property when they file a Chapter 7 case.  In fact, almost 99% of Chapter 7 cases are deemed “no asset” which means that the trustee found no property to sell for the creditors.  In making his determination, a trustee has to subtract any money owed on property and a debtor’s exemptions.  Next, he looks at the value of the property and how much he could sell it for after payment of any costs of sale.  If the value of the property is insufficient to pay the liens, costs of sale, and exemptions, the trustee reports the case as “no asset.”

To file a Chapter 7 case you must pass a means test (more on this in future posts). In simple terms, you may be denied Chapter 7 relief if you earn too much money. Our experienced Birmingham and Tuscaloosa bankruptcy lawyers can analyze your facts and tell you whether you qualify to file a Chapter 7. There are numerous ways to qualify a person for Chapter 7 and the means test does not apply to everyone. This is an area of bankruptcy where the experience of your attorney is extremely important. Make sure you hire an experienced attorney to handle your bankruptcy case.

Most people who file Chapter 7 are able to keep their property and wipe out their debts. In a Chapter 7 bankruptcy case you can choose to keep your home and cars by entering into an agreement with specific creditors to continuing paying on secured debt.

The filing fee for a Chapter 7 bankruptcy case is $299.00. There are other expenses in Chapter 7 that total around $100. Most experienced attorneys charge around $1200.00 for a simple Chapter 7 bankruptcy case.

If you are struggling with crushing debt you need to call Don and Melinda Dionne for a confidential, free, no obligation, consultation. Don and Melinda will show you how to get out of debt and start living again. Call now at 205-349-5911 (Tuscaloosa) or 205-453-1012 (Birmingham). Take the first step and let Don and Melinda show you how much better your life can be.