What Chapter 7 Can and Cannot Do for You
If you’re struggling to meet your financial obligations, chances are good that you’ve considered filing for Chapter 7 bankruptcy protection. It’s important to understand, though, that bankruptcy won’t solve all your problems and that there will be consequences. Before you decide to file, you want to know what a bankruptcy will and won’t do for you.
What Chapter 7 Bankruptcy Can Do For You
First and foremost, any bankruptcy filing (including a Chapter 7 petition) immediately puts an automatic stay into effect. Under the automatic stay, your creditors may not make any attempt to collect the debt except through the bankruptcy process. That means they can’t call, write, or take legal action against you. But be careful—if you violate the provisions of your bankruptcy or engage in fraud, the stay can be lifted.
A Chapter 7 bankruptcy filing allows you to permanently discharge certain debts in exchange for turning over some of your assets to the bankruptcy trustee to be sold to satisfy your creditors. As a general rule, most unsecured debt, such as credit card obligations and medical bills, can be discharged through Chapter 7. You also can discharge personal loans, residential lease obligations, utility bills, and most attorney fees.
What a Chapter 7 Bankruptcy Won’t Do For You
Under the bankruptcy laws, most family law obligations (child support and alimony) are not eligible for discharge. Student loan debt can be discharged, but it’s difficult to do so. Some tax debts may be discharged, but the rules for doing so are very strict.
It’s important to understand that bankruptcy only discharges the debt—it has no impact on any underlying liens on property. Accordingly, if you have a car loan, where the vehicle is pledged as collateral, you may have the debt discharged, but the lender can still enforce the lien and repossess the car.
Contact an Experienced Rockwall, Texas, Bankruptcy Attorney
At the Law Offices of Carrie Weir, all potential clients are entitled to a free initial consultation. I am currently communicating with clients by phone, text messaging, and videoconference. To arrange an appointment, contact my office online or call 972-772-3083. I handle personal bankruptcy filings throughout Rockwall County, Texas, including the cities of Rockwall, Heath, Greenville, Lavon, Wylie, Mesquite, and Rowlett.
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