An individual cannot file under chapter 7 or any other chapter, however, if during the preceding 180 days a prior bankruptcy petition was dismissed due to the debtor's willful failure to appear before the court or comply with orders of the court, or the debtor voluntarily dismissed the previous case after creditors sought relief from the bankruptcy court to recover property upon which they hold liens.
Exceptions
There are exceptions in emergency situations, this must be approved by the court. If you don't qualify for chapter 7 under the income guidelines, you have a second chance, it's called solvency. If you can prove your expenses (basic needs not luxury cars or things) are more than your income, then there is a chance the court will override the first rule and still allow you file chapter 7. The burden here is for you to prove to the judge your inability to fulfill the requirement of a chapter 13 bankruptcy.
One of the primary purposes of bankruptcy is to discharge certain debts to give an honest individual debtor a "fresh start." The debtor has no liability for discharged debts. In a chapter 7 case, however, a discharge is only available to individual debtors, not to partnerships or corporations. Although an individual chapter 7 case usually results in a discharge of debts, the right to a discharge is not absolute, and some types of debts are not discharged. Moreover, a bankruptcy discharge does not extinguish a lien on property.
What Is Exempt From A Chapter 7 Bankruptcy?
The following item are usually exempt from being discharged:
- Secured Debt - your outstanding balance can be discharged, but the item such as a house goes back to the bank
- IRS Debt - there are cases where this debt can be discharged, check with an attorney to see if you are one of those special cases.
- Student Loans - these are generally exempt from discharge.
- Child Support - another obligation that is generally exempt from discharge.
- Loans - of course if you took loans within 90 days before filling bankruptcy the judge has the right to contest this. Again, check with a lawyer to see what time frames apply in your state.
A chapter 7 case begins with the debtor filing a petition with the bankruptcy court serving the area where the individual lives or where the business debtor is organized or has its principal place of business or principal assets. In addition to the petition, the debtor must also file with the court: (1) schedules of assets and liabilities; (2) a schedule of current income and expenditures; (3) a statement of financial affairs; and (4) a schedule of executory contracts and unexpired leases.
The courts must charge a $245 case filing fee, a $39 miscellaneous administrative fee, and a $15 trustee surcharge. Normally, the fees must be paid to the clerk of the court upon filing. With the court's permission, however, individual debtors may pay in installments. Of course these fees will change over time, but as of 6-2-09 these are the fees.
Discharge
Usually within 60 to 90 days after your final meeting with the trustee the judge will approve the discharge. You are ready to start over again, your credit will have a big ding mark for a while, but that can be rebuilt over time. The key to this whole procedure is finding a good attorney who will give you the right advice for your situation.
Credit Damage
Chapter 7 bankruptcy stays on your credit report for 10 years. You cannot file chapter 7 again for another 8 years. After 2 years you can qualify for a mortgage loan with good rates. Rebuilding credit can be fast, usually you will start with a secured loan. Prepare to pay higher interest rates until you get reestablished which could take a few years.
FYI - It's unclear just how credit scores affect car insurance rates. In some cases your rates go up, in other cases it has no affect at all. The prudent thing to do is check around, each insurance company weighs these factors differently.
Conclusion
Chapter 7 bankruptcy is intended to give people, with dire financial situations, a fresh start. If you qualify, be sure to include every debt that qualifies. If your case is not complicated, a good bankruptcy lawyer should do just fine.
If you want one source that can make several referrals, then try Legal Match - Find a Lawyer. When it comes to bankruptcy lawyers there is no shortage of help. If legal match can't help, look online for local lawyers you can interview.
If you want one source that can make several referrals, then try Legal Match - Find a Lawyer. When it comes to bankruptcy lawyers there is no shortage of help. If legal match can't help, look online for local lawyers you can interview.
