What is a Chapter 7 bankruptcy?
A Chapter 7 bankruptcy case is a proceeding in which a person seeks total debt relief under Chapter 7 of the Bankruptcy Code. A person who files a Chapter 7 case seeks to obtain a court order releasing them from all of his dischargeable debts, which is known as a “discharge”. A person is released from and does not have to repay a debt that is discharged and creditors may not send bills, make collection phone calls, file lawsuits, garnish wages or take any action to collect debt that has been discharged.
Who is permitted to file a Chapter 7 case?
Any individual or business is permitted to file a Chapter 7 bankruptcy case.
What types of debts are dischargeable in a Chapter 7 case? -
Unsecured debts/loans -Credit Card Debit -Installment loans -claims subsequent to a foreclosure or repossession.
What types of debts are not dischargeable in a Chapter 7 case?
The following debts are by law non-dischargeable in a Chapter 7 case. - Most tax debts - Debts for obtaining money, property, services, or credit by means of false pretenses, fraud, or a false financial statement - Debts not listed on the debtor’s Chapter 7 Petition,. - Debts for domestic support obligations, which include debts for child support, alimony, maintenance, or support - Debts for intentional or malicious injury to the person or property of another - Debts for certain fines or penalties. - Debts for student loans - Debts for personal injury or death caused by the debtor’s operation of a motor vehicle, vessel or aircraft while intoxicated.
Will a person lose property in a Chapter 7 case?
In some cases, yes. However, under certain circumstances, a person may keep property that has been purchased subject to a valid security interest such as a house, car, furniture, or electronic equipment.
Are there any requirements to be met before a Chapter 7 case can be filed?
Yes. In order to file a Chapter 7 case a person must obtain a Credit Counseling Certificate from an approved nonprofit budget and credit counseling agency that outlines the opportunities for available credit counseling and assists the person in performing a budget analysis. This briefing may be conducted by telephone or on the internet. When the Chapter 7 case is filed, a certificate from the agency must be filed with the court.
How much is the filing fee in a Chapter 7 case and when must it be paid?
The filing fee is $299.00 for either a single or a joint (husband and wife) case. The filing fee is payable when the case is filed.
May a husband and wife file a Chapter 7 case jointly?
Yes. A husband and wife may file a joint case under Chapter 7.
Under what circumstances should a joint Chapter 7 case be filed?
A husband and wife should file a joint Chapter 7 case if both of them are liable for one or more significant debts. If both spouses are liable for a substantial debt and only one spouse files under Chapter 7, the creditor may later attempt to collect the debt from the nonfiling spouse, even if he or she has no income or assets.
How does the filing of a Chapter 7 case by a person affect collection and other legal proceedings that have been filed against that person in other courts?
The filing of a Chapter 7 case automatically suspends all collection and other legal proceedings pending against a person. Criminal proceedings and actions to collect domestic support obligations are not affected by the automatic stay. The automatic stay does not protect cosigners and guarantors of the person filing, and a creditor may continue to collect debts from cosigners and guarantors after the case is filed.
How does a Chapter 7 Case affect a person’s credit rating?
It will usually lower a person’s overall rating. The fact that a person has filed a Chapter 7 case can appear on his credit report as long as ten (10) years.
Are the names of persons who file bankruptcy cases made public?
When a Chapter 7 case is filed, it becomes a public record and the names of the persons filing may be published by credit reporting agencies.
Are debtors’ employers notified of bankruptcy cases?
Employers are not usually notified when a bankruptcy case is filed.
Does a person lose any legal or civil rights by filing a bankruptcy case?
No. By filing a bankruptcy case a person does not lose any civil or constitutional rights by filing.
May employers or governmental agencies discriminate against persons who file bankruptcy cases?
No. It is illegal for either private or governmental employers to discriminate against a person as to employment because that person has filed a bankruptcy case. It is also illegal for local, state, or federal governmental agencies to discriminate against a person as to the granting of licenses (including a driver’s license), permits, student loans, and similar grants because that person has filed a bankruptcy case.
What is exempt property?
Exempt property is property that is protected by law from the claims of creditors. The types and amount of exempt property is determined by Maine State Law.
What should a person do if a creditor later attempts to collect a debt that was discharged in his bankruptcy case?
When a Chapter 7 discharge is granted, the court enters an order prohibiting creditors from later attempting to collect any discharged debt from the debtor. Any creditor who violates this court order may be held in contempt of court and may be liable to the debtor for damages.
How does a Chapter 7 discharge affect the liability of cosigners and guarantors who may be liable to a creditor on a discharged debt?
The Chapter 7 discharge releases only the person or persons who filed the Chapter 7 case. The liability of any other party on a debt is not affected by a bankruptcy discharge.
How often can a person file a Chapter 7 case?
A person can file a Chapter 7 case once every eight (8) years.
What is the role of the attorney for the person filing a bankruptcy case?
The attorney for the person filing performs the following functions in a typical bankruptcy case:
A. Analyze the amount and nature of the debts owed by the person filing and determine the best remedy for the person’s financial problems. B. Advise the person filing of the relief available under all chapters of the Bankruptcy Code, and the advisability of proceeding under each chapter. C. Assist the person in obtaining the required pre-bankruptcy budget and credit counseling briefing. D. Assemble the information and data necessary to prepare the bankruptcy forms for filing. E. Prepare the petition, schedules, statements and other forms for filing with the bankruptcy court. F. Filing the Chapter 7 petition, schedules, statements and other forms with the bankruptcy court, and if necessary, notify certain creditors of the commencement of the case. G. Attending the meeting of creditors with the person and appearing with the person at any other hearings that may be held in the case. H. Assist the person filing in attending and completing the required instructional course on personal financial management .
Recent Comments