Some Important Aspects of Chapter 7 Bankruptcy Laws

Chapter 7 bankruptcy laws allow a complete discharge of your current debts when you have determined that you never expect to be reasonably able to repay them. This means that your debts will be completely erased, but usually this entails forfeit of your non-exempt property or its cash equivalent. This is why chapter seven bankruptcy is often referred to as "liquidation bankruptcy" or "straight bankruptcy." Since chapter 7 bankruptcy laws arrange for the total removal of all your debts (whereas chapter 13 commits you to repay most of them), there are several important factors that will play a role in determining your case. Bankruptcychapter7 cannot be abused as a shelter from other impending legal obligations, and so there are many limitations on filing as well as stringent guidelines concerning debt eligibility in a chapter seven case.

Limitations on discharge

Your chapter 7 bankruptcy case might be denied if it is found that you: have received a discharge of your debts less than six years ago; have made any significant transfers of money or property either one year before or six months after filing bankrupcy in an attempt to shelter your items from liquidation; have lost or intentionally destroyed any documents pertaining to your financial history; have otherwise falsified information in any way or form.

Non-dischargeable debt
Chapter 7 will eliminate unmanageable consumer debt of most types so that individuals can make a new financial start and creditors can reach account settlement. However, chapter 7 bankruptcy laws are not intended to allow you to skirt personal financial responsibilities that are linked to "non-financial," legal, or social causes. This means that you cannot erase debt when it is related to child support, alimony, drunk driving fines, or other legal penalties. Under most cases you cannot discharge student loans. Furthermore, you cannot erase credit card debt when these credit cards have been used to pay taxes or any other legal fines. Credit card debt that demonstrates a purchase of luxury goods in excess of $1,000 from a single creditor within 6 months of filing your case cannot be discharged. Furthermore, any non-identified or misnamed debts in your petition will not be counted and present the risk that the bankruptcy court will dismiss your case. The debts you owe that are non-dischargeable under chapter 7 bankruptcy are still subject to collection, which means that even if your case has been approved and the majority of your debts are discharged, you are not protected from collection attempts for your non-dischargeable debts.


(in Oakland, CA)



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