How To File For Chapter 7 Bankruptcy

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What is Chapter 7 Bankruptcy ?

While there are various forms of bankruptcy available to consumers, the most commonly utilized type of bankruptcy is Chapter 7. At its most basic level, Chapter 7 bankruptcy operates by liquidating your non-exempt assets and using the proceeds from them to pay off creditors. Most, if not all, leftover debts are discharged, which means that you are no longer under any legal obligation to pay them off.

What Happens When You File For Bankruptcy?

The mere thought of bankruptcy can be frightening to many people. If you think that filing for bankruptcy means that you will lose your home, your car, and be unable to feed yourself or your family, you are not alone. You are also wrong. Bankruptcy is not equivalent to a financial life sentence but rather is a business plan that allows people who have gotten in over their heads with debt to obtain a financial fresh start. In many cases, if you file for bankruptcy, you will actually be in a better financial situation than you were prior to filing the moment your case is over. Rather than being the capstone moment of financial failure, bankruptcy is often the start of a new, brighter financial future.


While this may sound simple, it the process can be quite complicated, so if you are thinking about filing bankruptcy, call The Law Offices of Michael Alan Siddons, Esquire at 610-255-7500 to discuss all of your options for Chapter 7 bankruptcy in Media, PA; Rising Sun, MD & Staten Island, NY surrounding areas.

The Best Way to File Chapter 7

Step 1 - Hire An Attorney

If you have fallen behind on your bills, you may be in the unenviable position of having debts that you are struggling to keep from getting bigger, much less pay off. This often occurs with high-interest debt such as credit cards or payday loans, where your interest rate can be upwards of 20 percent. Simply keeping up with these debts may make it difficult to afford your rent or mortgage, your car payment, your medical expenses, or simply the day-to-day expenses associated with life.

What Can Filing For Chapter 7 Do For Me?

Fortunately, Chapter 7 bankruptcy can often completely eliminate these kinds of debts, allowing you to finally get ahead financially. Some of the categories of debt that bankruptcy can eliminate include the following:
  • Medical expenses
  • Credit card bills
  • Certain tax debts
  • Auto loans
  • Utility bills
  • Personal loans
  • Business debts
  • Civil judgments
  • Collection accounts
  • Past due rent
Importantly, there are certain categories of debts that bankruptcy cannot eliminate, including student loan debt (except in certain circumstances), recent tax debts, child support and alimony debts, and fines and penalties associated with criminal violations. To determine exactly which of your debts bankruptcy may be able to eliminate, you should meet with an experienced attorney as soon as possible.

Hire a Chapter 7 Attorney to Determine Whether Bankruptcy is the Right Option for You

Our Law Firm Handles Bankruptcy Cases Throughout Media, PA; Rising Sun, MD & Staten Island, NY surrounding areas

Not every bankruptcy case goes smoothly, and there are instances in which creditors may object to a discharge for various reasons or the court may take issue with the way exemptions are claimed, for example. If this occurs in your case, your lawyer will vigorously advocate for your position and fight to ensure that your bankruptcy is resolved in the most favorable way possible.

Just because you are having trouble paying your bills does not necessarily mean that you should file for bankruptcy. Bankruptcy can have a negative impact on your credit and can make it difficult or expensive to get approved for financing for large purchases. For this reason, it is important to have an attorney fully evaluate whether the discharge of your eligible debts would be worth the negative impact on your credit. In addition, not everyone is able to file for Chapter 7 bankruptcy - you need to be able to pass the "means test, " which weighs your monthly income against your expenses in order to see whether it is possible for you to pay your debts. If you cannot pass the means test, you cannot file.

It is important to keep in mind that an attorney, unlike a debt consolidation company, is ethically bound to keep your best interests in mind. As a result, you can rest assured that the advice that a lawyer gives you about whether or not you should file for bankruptcy is sound and not simply a sales pitch to get another customer.

Make Sure that Your Bankruptcy Filing is Accurate and Complete

The amount of paperwork associated with filing for bankruptcy can be extremely daunting. In addition, any errors or omissions in your filing could result in your case being rejected by the court or your discharge denied. In a worst-case scenario, you could even be accused of bankruptcy fraud, which could potentially have criminal consequences. For this reason, it is highly advisable for anyone filing for bankruptcy to do so with the assistance of a skilled lawyer. When you hire an attorney, he or she will thoroughly evaluate your situation, collect the necessary documentation, fill out the required forms, and file them with the appropriate court. In addition, should a court appearance or a hearing become necessary, your lawyer will appear on your behalf and represent your interests.

Help you Meet all of the Requirements Necessary for a Discharge

Obtaining a bankruptcy discharge is not as easy as filing some paperwork with a court and sitting back and waiting. Before the court discharges your debts, you must attend a credit counseling session in the 180-day period before you file for bankruptcy, a personal financial management course, and a 341 meeting of creditors. While these requirements may seem daunting, your lawyer will thoroughly explain how to schedule or attend these meetings and will help you if you experience any difficulty.

Will I Lose all of my Assets in Chapter 7 Bankruptcy?

If you are like most people, you may have concerns about being able to keep your property if you file for Chapter 7 bankruptcy. After all, the fundamental idea behind Chapter7 is the liquidation of a debtor's assets in order to pay off creditors. Fortunately for debtors, both state and federal law provide various exemptions that allow you to protect your assets from being included in your bankruptcy. In fact, many people who file for bankruptcy are able to keep all of their assets while having their debts discharged. Some of the exemptions often utilized by people who file for bankruptcy include the following:

  • The federal homestead exemption - This exemption allows you to protect $23,675 of the equity in your home. This means that if you have less than this amount in equity and can continue making mortgage payments after your bankruptcy, you will likely be able to keep your home even if you file for bankruptcy.
  • Personal property exemptions - There are exemptions available for various types of property, including motor vehicles, jewelry, household goods, tools of trade, health aides, and insurance policies.
  • Pension and retirement benefits exemptions - New Jersey law completely exempts public employee's pensions and retirement benefits from any bankruptcy proceedings.
  • Unemployment compensation exemption - If you are collecting unemployment benefits, they are exempt from your assets included in your bankruptcy estate.
  • Workers' compensation exemption - Similarly, workers' compensation benefits are exempt in Chapter 7 bankruptcy under New Jersey law.
In many bankruptcy cases, fully utilizing the available exemptions allows debtors to continue living as they normally do while having their debts wiped out. The best way to file for Chapter 7 and ensure that you take advantage of all of the exemptions available to you is to file for bankruptcy with the assistance of a top Chapter 7 attorney.

If you are considering filing for bankruptcy, it is very likely that you are already in financial trouble and are trying to save money every chance that you get. While reigning in spending and being frugal is generally a good idea, retaining a qualified and experienced bankruptcy attorney is not an expense that you should try to avoid. A qualified attorney can help you in many ways and can ensure that you are in the best possible financial position after your bankruptcy case has been concluded.

For a Free Consultation to See if Bankruptcy is Right for You, Contact Our Firm Today

The decision to file for bankruptcy is an important one and should not be made without a careful consideration of all of the relevant facts. While bankruptcy can certainly provide a fresh financial start and eliminate debts, it is not advisable in every case. For this reason, if you are considering filing for bankruptcy, you should hire an attorney to file chapter 7 as soon as possible. Michael Alan Siddons is a skilled bankruptcy attorney who understands how to take full advantage of the bankruptcy code to ensure his clients keep as much of their property as possible while obtaining a discharge of their debts. To schedule a free consultation with Mike, call our office today at 610-255-7500. If you would prefer to send an email, please fill out and submit our online contact form. Our firm is based throughout Media, PA; Rising Sun, MD & Staten Island, NY.