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If you are considering a Chapter 7 bankruptcy, the lawyers of Seymour Law Firm LLC will speak to you free of charge, answering your questions at no obligation. It is important to know what a Chapter 7 bankruptcy can do for you, and what it can't. The Chapter 7 bankruptcy lawyers of Seymour Law Firm LLC can answer your questions and help you figure out your best option. If you decide to hire us, we can work out a payment plan, if necessary, that you can live with. Contact us right away.

Frequently Asked Questions about Chapter 7

Q: How does Chapter 7 liquidation work?

A: In a Chapter 7 case, the debtor must turn his or her nonexempt property over to a bankruptcy trustee, who then converts the property into cash by selling it and pays the debtor's creditors from the sale proceeds. In return, the debtor receives a Chapter 7 discharge if he or she pays the filing fee, is eligible for such a discharge, and obeys the court's directives.

Q: Who is ineligible for a Chapter 7 discharge?

A: A person may not be eligible for a discharge under Chapter 7 if he or she has been granted a discharge in a Chapter 7 case filed within the last eight years or in a Chapter 13 case filed within the last four years; if he or she engages in certain fraudulent conduct related to the bankruptcy or his or her financial situation; or if he or she refuses to answer questions or obey orders of the bankruptcy court; or if he or she fails to qualify under the financial means test.

Reasons for a Chapter 7 Bankruptcy
Our attorneys believe very strongly in the power of a bankruptcy to help people through difficult times. People come to us burdened with medical bills from a sudden illness or injury. Some may come to us after having made mistakes with credit cards.

It is only after extensive study of your debts that we advise whether or not bankruptcy is appropriate for you.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.

About Chapter 7 Bankruptcy

Chapter 7 bankruptcy is also known as "debt liquidation," in that it takes many of your assets, sells them, and then wipes some of your debts clean. There are many important things to know:

• As soon as you file for bankruptcy, all creditor harassment and collection lawsuits must stop immediately.
• You can agree to give up your car or home to the debt liquidation, but you do not have to. It depends on your particular circumstances.
• Not all debts can be erased by a Chapter 7. For example, some tax debt can not, but credit card debt can.

Both individuals and small businesses can find themselves with more debts than they can pay when due. In such cases, filing bankruptcy may provide a solution to what seems like an insurmountable problem. Bankruptcy law provides two basic forms of relief: (1) liquidation; and (2) rehabilitation, also known as reorganization. Most bankruptcies filed in the United States involve liquidation, which is governed by Chapter 7 of the Bankruptcy Code. A skillful attorney can advise individuals and businesses alike on whether Chapter 7 may be the right choice for them. The bankruptcy lawyer's goals are to help debtors make a fresh start and ensure that creditors get paid.

Because bankruptcy law is primarily federal in origin, it varies little from state to state. The individual states do, however, retain jurisdiction over certain debtor-creditor issues that are not addressed by and do not conflict with federal bankruptcy law, such as which property remains exempt from creditors' claims.

Debts that Remain After a Chapter 7 Discharge
The rules on which debts are discharged, or eliminated, are different depending on which type of bankruptcy is filed. A lawyer experienced in bankruptcy law can advise his or her clients on whether and how particular debts will be affected by a bankruptcy discharge. Generally speaking, in a Chapter 7 proceeding, the following debts are not discharged.

What is a "Discharge" Under Chapter 7?
"Discharge" in the bankruptcy sense refers to clearing the debtor's slate of all, or most, past debts. Although many people expect that filing bankruptcy will wipe out all of their debts, it is not always the case. Bankruptcy only discharges certain debtors of certain debts. The availability of discharge depends on the type of bankruptcy proceeding involved, who the debtor is, and what type of debts the debtor has. An experienced bankruptcy attorney can advise his or her clients as to which debts will be discharged by a Chapter 7 bankruptcy and which debts will remain.

Exempt vs. Non-exempt Property Under Chapter 7
In a Chapter 7 liquidation case, the debtor has to turn certain property over to the bankruptcy trustee so that the property can be sold and the proceeds used to pay off debts. Debtors, whether they are businesses or individuals, are often justifiably concerned about what property they will be allowed to keep and what they must give up. Experienced bankruptcy lawyers can answer these and other questions, allay fears, and keep the process moving forward as painlessly as possible.

Non-Bankruptcy Workouts
The term "workout" is used to describe a non-bankruptcy negotiated modification of debt. More simply stated, a workout is an agreement worked out between a debtor and his or her creditors for repayment of the debts between them, which is negotiated without all the procedural complications-and perhaps the stigma-of the bankruptcy process. Lawyers experienced in bankruptcy and debtor-creditor law can advise both debtors and creditors on whether a non-bankruptcy workout may be their best course of action.

Alternatives to Chapter 7

Debtors should be aware that there are several alternatives to chapter 7 relief. For example, debtors who are engaged in business, including corporations, partnerships, and sole proprietorships, may prefer to remain in business and avoid liquidation. Such debtors should consider filing a petition under chapter 11 of the Bankruptcy Code. Under chapter 11, the debtor may seek an adjustment of debts, either by reducing the debt or by extending the time for repayment, or may seek a more comprehensive reorganization. Sole proprietorships may also be eligible for relief under chapter 13 of the Bankruptcy Code.

In addition, individual debtors who have regular income may seek an adjustment of debts under chapter 13 of the Bankruptcy Code. A particular advantage of chapter 13 is that it provides individual debtors with an opportunity to save their homes from foreclosure by allowing them to "catch up" past due payments through a payment plan. Moreover, the court may dismiss a chapter 7 case filed by an individual whose debts are primarily consumer rather than business debts if the court finds that the granting of relief would be an abuse of chapter 7. 11 U.S.C. § 707(b).

If the debtor's "current monthly income"(1) is more than the state median, the Bankruptcy Code requires application of a "means test" to determine whether the chapter 7 filing is presumptively abusive. Abuse is presumed if the debtor's aggregate current monthly income over 5 years, net of certain statutorily allowed expenses, is more than (i) $10,000, or (ii) 25% of the debtor's nonpriority unsecured debt, as long as that amount is at least $6,000. (2) The debtor may rebut a presumption of abuse only by a showing of special circumstances that justify additional expenses or adjustments of current monthly income. Unless the debtor overcomes the presumption of abuse, the case will generally be converted to chapter 13 (with the debtor's consent) or will be dismissed. 11 U.S.C. § 707(b)(1).

Debtors should also be aware that out-of-court agreements with creditors or debt counseling services may provide an alternative to a bankruptcy filing.

Bankruptcy Statistics
The Administrative Office of the U.S. Courts compiles statistics on bankruptcy filings for each quarter ending December, March, June and September. The fiscal year for the federal Judiciary ends September 30. The calendar year ends December 31. Quarterly and 12-month statistics are available approximately 2 months after the close of a quarter.

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If you have any questions about Chapter 7 bankruptcy, our attorneys are always ready to help.
Contact us to speak with one of our lawyers, for no charge and at no obligation.