What Debts Will Be Released By A Chapter 7 Bankruptcy?
The debts that will be released by a Chapter 7 bankruptcy include credit card debts, medical bills, unsecured personal loans, secured credits, and debts to family or friends. If a person so chooses, they can also eliminate their car loan and surrender their car, as well as eliminate their liability on their house.
Is There Anything That’s Not Dischargeable In A Chapter 7 Bankruptcy?
There are a number of exceptions to bankruptcy requirements that can be found in 11 USC Section 727. Debts that were incurred from income that was meant to defraud a creditor or subject to a criminal complaint are not dischargeable. Debts arising out of a marital or divorce settlement agreement are not dischargeable, such as alimony. In addition, debts incurred from the violation of tax laws or debts that were already included in a previous bankruptcy are not dischargeable. If a person caused an injury or a death while driving under the influence, then the associated fines would not be dischargeable.
Will I Lose All Of My Property In A Chapter 7 Bankruptcy?
An individual will not lose all of their property in a Chapter 7 bankruptcy. Under the bankruptcy code, there are bankruptcy exemptions that permit a person to protect different types of property up to certain values. For example, if someone uses federal exemptions, then they will be able to protect their house for a value of up to $23,650 in equity. Essentially, this is the court’s way of acknowledging that people who need to file bankruptcy also need to have a roof over their head, but do not necessarily need an exorbitant amount of money in equity. There are separate exemptions for goods, vehicles, and jewelry. If there is an issue with regard to the protection of a particular asset, then a Chapter 13 bankruptcy could be considered.
How Does Filing A Chapter 7 Bankruptcy Affect Lawsuits Or Attachments That May Have Already Been Filed Against Me?
Lawsuits or attachments that were previously entered against someone or pending will immediately end once a Chapter 7 bankruptcy has been filed. This will protect the debtor and give them immediate relief. If a lawsuit proceeds and a judgement is entered due to the fact that bankruptcy was not filed for in time, then the creditors will have three avenues to pursue: freeze or attach the individual’s bank account, garnish the individual’s wages, or place liens on the individual’s property. Once receiving lawsuit documentation, a debtor is best served by planning accordingly and filing for bankruptcy as soon as possible in order to avoid the aforementioned consequences.
If the debtor does not file for bankruptcy in time and their wages are garnished as a result, then they will still be able to file for bankruptcy in order to end the wage garnishment. If a creditor freezes a debtor’s bank account, then the debtor can file for bankruptcy in order to regain access to their funds. If a creditor places a lien on the property, then an attorney would have to file a motion in section 522 of the bankruptcy code in order to have the lien removed. Ensuring that the lien gets removed is important because a lien will remain on a property even after bankruptcy, which would prevent the selling of the property. Even if someone wanted to sell the property 10 years down the road but decided not to pursue a motion to remove the lien, the creditor would be able to collect the equity after the house has been sold.
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