Are you wondering how to file bankruptcy Chapter 7? Or if filing for bankruptcy is right for you?
We’re here to help.
If you’re struggling with debt and considering bankruptcy, speaking with a bankruptcy lawyer can help you determine your best options and give you some clarity on how the process works.
At Sawin & Shea, LLC, our Chapter 7 Bankruptcy lawyers have helped clients just like you in the Indianapolis and surrounding areas. With over 65 years of combined bankruptcy and consumer protection legal experience, we know what it takes to help our clients achieve financial freedom and successfully complete their Chapter 7 bankruptcies.
Before working with any lawyer, however, it’s always important to do your research and prepare a list of questions to ensure the lawyer you choose has the experience and skills necessary to help you successfully navigate the bankruptcy process.
Chapter 7 bankruptcy, also known as liquidation or straight bankruptcy, can help those having financial difficulties clear away various types of debts. When you file for Chapter 7 bankruptcy, the Court will place an automatic stay upon filing, which stops creditors from collecting payments, garnishing wages, or repossessing property.
You will be assigned a trustee during the process who will review your assets and finances. They will then determine what, if any, non-exempt property they can seize and will use the proceeds from that property to repay a percentage to your creditors. Most Chapter 7 cases are what we call “no-asset” cases and people keep everything they have.
In general, the entire process from filing to discharge of debts takes about three to four months. However, every case is different. Various factors can play a role in how long your bankruptcy takes, such as how long it takes to submit all of your documents and if a Trustee is going to collect and sell off any of your property. And a significant amount of time comes from mandatory waiting periods required by the law.
When you file a Chapter 7 bankruptcy, it is only your unsecured debts that will be eligible for discharge. This includes debts such as credit card balances, medical bills, personal loans, utility bills, back rent, mortgages, and car payments. However, if you used your home or car as a secured debt with a lender, you may need to return the property to the lender if you don’t pay as agreed.
Some unsecured debts are not eligible for discharge in a Chapter 7 bankruptcy, which include:
- Child support
- Student loans
- Certain kinds of tax debt
- Homeowners’ association fees
- Court fees and penalties
State and federal laws protect certain properties in bankruptcy, meaning they are exempt and cannot be taken by your Trustee on behalf of your creditors. Most people keep everything they have in Chapter 7 cases. It is important to talk to a bankruptcy attorney about what might be at risk in your case.
Also, if you have a debt that is a lien against collateral (a car loan, a mortgage loan), the creditor can force a return of that collateral to try and partially satisfy their debt. That being said, most creditors allow debtors to reaffirm their secured debts, which means you can keep the property so long as you are current on payments.
5. What Are Your Bankruptcy Lawyer Fees?
Legal and attorney fees can vary from one law firm to the next. There are also court fees you will need to pay when you file. Currently, the Court’s filing fees for Chapter 7 are $338. As for the lawyer fees, you should ask your attorney what their fee structure is when you sit down to meet with them. A good lawyer will have nothing to hide and should be upfront about the cost of working with them.
6. What Will Happen to My Credit Cards When I File Chapter 7?
Most debtors cannot keep their credit cards when they file for Chapter 7. You will need to disclose all of your credit cards that have a balance on them when you file. However, even your cards that have a zero balance will likely lose borrowing privileges. But the good news is that credit card debt is dischargeable in Chapter 7 bankruptcy.
Typically, Chapter 7 bankruptcy stays on your credit report for ten years. The standard is ten years for Chapter 7 and seven years for Chapter 13. This means that doing things after bankruptcy to build credit is important.
When you sit down with your bankruptcy lawyer, they can help you weigh the pros and cons of filing and your credit report taking a hit. In many cases, it is worth it to file to alleviate the financial burden, even though your credit will be affected. In a lot of cases, bankruptcy can actually improve your credit. It can stop negative information from continuing to pile up on your reports. Your lawyer can also offer advice on rebuilding your credit faster after your bankruptcy is complete.
Navigating bankruptcy on your own is generally not advised. While you can file without one, there are a lot of legal details and paperwork to stay on top of, and if you make any mistakes, it can negatively affect your case and prolong the process.
Working with a Chapter 7 bankruptcy lawyer will give you peace of mind and help the process go smoother. They can also help protect your assets and help you more efficiently achieve financial freedom.
A good bankruptcy lawyer will:
- Offer you a free initial consultation to review your case and help you determine your best options.
- Offer you advice and help you better understand what to expect.
- Help you gather all necessary information and file paperwork.
- Represent you in court.
At Sawin & Shea, we provide compassionate and understanding representation to those struggling with debt and filing for bankruptcy. Whether you are considering applying or need help with something during or after your bankruptcy, we are here to help.
Contact us at 317-759-1483 or send us an email for a free consultation today with one of our Chapter 7 bankruptcy lawyers today!