Chapter 7 Bankruptcy

consumer bankruptcy

Chapter 7 Bankruptcy will eliminate (discharge) unsecured debts such as credit card debts, medical bills, most personal loans, judgments resulting from car accidents, judgments on repossessed vehicles, some older tax debts (over 3 years old), payday loans and garnishments.

Certain debts cannot be eliminated (or can be under very specific circumstances):

  • Most tax debt under 3 years old
  • Student loans
  • Child support payments
  • Alimony
  • Home mortgages *
  • Car payments *
  • Other property securing a debt *

From beginning to end, a Chapter 7 Bankruptcy takes an average of four (4) months.

The new bankruptcy law requires pre-qualification for Chapter 7 filings. A Means Test determines whether your monthly income for a family of your size falls above or below the median income in Texas (or in your state). Approximately 96% of all Chapter 7 requests qualify. If you are of the small minority that does not qualify – you still have the option of filing a Chapter 13.

*If you want to keep your home, car(s), and property securing a debt. All secured loans must be reaffirmed through the bankruptcy court.

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