Miami Valley Law Blog

Wednesday, September 4, 2013

Chapter 7 Bankruptcy

Chapter 7 at a glance:

Some typical benefits of Chapter 7 relief in most cases are as follows:

  • It’s quick, there are no lengthy plan payments to follow
  • Your unsecured debts are discharged in 4-6 months
  • Your credit card debts are erased
  • Your medical bills are erased
  • You can retain your home and car and other personal property
  • Temporarily suspends a foreclosure action against your home
  • Civil lawsuits or judgments against you are stopped and/or dismissed
  • Stops all wage garnishments and bank account attachments
  • Stops creditors from continuing to make harassing calls about your debts
  • No repayments to unsecured creditors or debt consolidation agencies
  • You can even discharge reinstatement fees assessed by the BMV
  • Can qualify for new credit almost immediately after filing

However, there are some drawbacks to Chapter 7:

  • Secured creditors can continue with a foreclosure or repossession of your property after requesting and receiving permission or “relief of stay” from the bankruptcy court
  • The bankruptcy remains on your credit report for 10 years
  • You cannot discharge most student loans, income tax liens, child support arrearage or alimony obligations
  • You can only receive a Chapter 7 discharge once every 8 years
  • You have to pay all your attorney fees and filing costs before filing
  • You may have to pay something to unsecured creditors if you have non-exempt equity in property
  • You may have to give up all or part of your tax refund(s)

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