Facts about Chapter 7 bankruptcy
A Chapter 7 bankruptcy is also known as Liquidation Bankruptcy. This means any property or asset that is not protected under the State Code will be liquidated by the Bankruptcy Trustee and proceeds will go towards paying creditors. Most of your assets will be exempt or protected such as household items as well as a car and up to $100,000 in home equity (in Idaho only) and you won’t lose them in the bankruptcy. Once the bankruptcy process is completed, your obligation to repay those unsecured debts will be discharged and you will be financially free.
- Chapter 7 bankruptcy allows you to eliminate most of your debts while keeping your property.
- Chapter 7 bankruptcy in Idaho stops garnishments, lawsuits, foreclosures, repossessions, tax levies, student loan garnishments, collection letters and phone calls.
- Chapter 7 bankruptcy wipes out most debts including credit card debt, medical bills, car loans and mortgages.
- Chapter 7 bankruptcy can even eliminate old income tax debt.
- Chapter 7 bankruptcy allows you to keep your property in most cases. However property can be lost in some cases. You should consult an experienced attorney prior to filing a Chapter 7 to ensure that you receive correct information regarding which property you can keep. An attorney knowledgeable about bankruptcy laws can tell you if a Chapter 7 will work for you.
If you have a car loan and you want to get out of the debt, a Chapter 7 might be ideal. With Chapter 7, you can return the car, and the debt will be gone.
If you recently lost a home to foreclosure, or if you want to get out from under your home loan, Chapter 7 bankruptcy will eliminate the debt. You’ll have to return the home to the lender, but the debt will be gone.
Chapter 7 bankruptcy will stop garnishments, including those for taxes and student loans.
Chapter 7 bankruptcy takes only about 120 days to complete in most cases. You must take a credit counseling course before and after your case is filed. These courses may be taken on the internet or by telephone. Once filed, you’ll have to go to court for a five-minute hearing. Creditors rarely appear at these hearings.
You can’t eliminate all debts in a Chapter 7 bankruptcy case. Student loans, most taxes, child support and alimony survive Chapter 7. However, eliminating your other debts in a Chapter 7 leaves you more money to make your payments on student loans, taxes and child support.
If you’re questioning whether you ought to file for bankruptcy, don’t hesitate to contact Taylor Law & Mediation in Mountain Home, Idaho.