bruce magness attorney at law 
 

Chapter 7 (Fresh Start Bankruptcy)

In a bankruptcy case under a chapter 7, you file a petition asking the court to discharge your debts. The basic idea in a chapter 7 bankruptcy is to wipe out (discharge) your debts in exchange for your giving up property, except for “exempt” property which the law allows you to keep. In most cases, all of your property will be exempt, such as your house, your cars, your household goods, and your retirement plan. Any property which is not exempt is subject to being sold, with the money distributed to creditors. On occasions, a Debtor will have exempt funds from which a non-exempt asset to be sold by the Trustee, can be bought back by the Debtor.

If you want to keep property like a home or a car and are behind on the payments on a mortgage or car loan, and you cannot get current right away, a chapter 7 case probably will not be the right choice for you. That is because chapter 7 bankruptcy does not eliminate the right of mortgage holders or car loan creditors to take your property to cover your debts. Again, to file under chapter 7 when you are behind on your house or car or other exempt property which you want to keep, you must get current on those items before you file.

From the date of filing of the case until date you get your written discharge in the mail is normally about four months. 


 
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