Chapter 7 Bankruptcy Information

Chapter 7 Bankruptcy Information • Chapter 7 Bankruptcy is a Liquidation Bankruptcy • The Court Appoints a Trustee to identify your Assets and Debts • The Trustee Sells Your Non-Exempt Property to Pay Your Creditors • Your Remaining Debts are Discharged Can You Take Chapter 7 Bankruptcy? • You Can Take Chapter 7 Bankruptcy Three Times During Your Life • You Must Wait 8 Years Between Chapter 7 Bankruptcies • You Must Pass a Means Test – The Means Test Determines Whether Or Not You Have Enough Income To Pay Your Debts Without Taking Bankruptcy. The Means Test • You are Eligible For A Chapter 7 if: • Your Income For The Past 6 months is less than the median income for your area: or • After deducting your allowed expenses for housing, transportation, and food, you have less than $166 per month left over. Bankruptcy Means Test Calculator • Click on This Link to See If You Pass The Means Test. • If You Fail The Means Test, You May Still Take A Chapter 13 Bankruptcy. Mandatory Debtor Counseling • You Must Complete A Debtor Education Course From An Approved Provider Within 180 Days Before Filing For Bankruptcy • The Provider Will Give You A Certificate of Completion • You Must File The Certificate of Completion With Your Bankruptcy Petition What Happens When You File For Bankruptcy? • All of Your Property, Your Debts, And Assets Become The Property of The Bankruptcy Trustee. • The “Automatic Stay” is Triggered – All Debt Collection Efforts, Lawsuits, Garnishments, Foreclosures, and Repossessions Are Stopped. How Are My Debts Treated? • There Are Two Types of Debt, Secured and Unsecured • Secured Debts are Debts Secured by Property Such As Your Mortgage or Car • All Other Debts are Unsecured – If A Debt Is Secured, You Can Continue Making The Payments And Keep The Item, Or You Can Give It Back To The Creditor. – If A Debt Is Unsecured, It will Be Paid Out of What Property Can I Keep? • You Can Keep Your Exempt Property • Exempt Property Varies By State. • It Includes – Home Equity, Equity in Motor Vehicles, Tools of The Trade, Your Retirement Savings and Some Personal Property. – Check The State By State Information Page for Your Exemptions. How Long Does It Take? – 180 Days Before Filing --Take Debtor Counseling Class – Filing – 14 days After Filing Trustee Meeting Scheduled – 30-45 Days After Filing Trustee Meeting – 90 Days Creditors Must File Claims – 180 Days -- Discharge How Does A Chapter 13 Plan Work? • It is a Reorganization Plan • You Make Monthly Payments of All of Your Excess Income (Above $166.00) for a minimum of 36 months to a Maximum of 60 Months. • After You have Made Your Payments, You Receive a Discharge. • You can pay the plan off early.