Dubuque Chapter 7 Bankruptcy Lawyers
If you are struggling with debt, you may be wondering if filing for bankruptcy is the right decision for you. Chapter 7 bankruptcy is often referred to as a liquidation bankruptcy. However, in reality, little is liquidated in a Chapter 7 case. Most nonexempt property is protected from liquidation, and the remainder is sold for cash to pay creditors.
The purpose of Chapter 7 bankruptcy is to discharge unsecured debts. This means that if you file, you will no longer be responsible for paying back things like medical bills, credit cards, and personal loans. Unfortunately, if you are behind on your mortgage payments, filing for Chapter 7 will not help you catch up on your mortgage.
Who is Eligible to File for Chapter 7 Bankruptcy?
To be eligible to file for Chapter 7 bankruptcy, individuals, partnerships, corporations, or other business entities can qualify for relief under Chapter 7 of the Bankruptcy Code. Some key points regarding eligibility include:
- Income Requirements: The average monthly income of the debtor in the previous six months should be lower than the median income for their state. However, certain exemptions and deductions may be considered.
- Debt Counseling Course: Applicants must complete a debt counseling course with an approved credit counseling agency before filing for Chapter 7 bankruptcy.
- Natural Person: Chapter 7 bankruptcy is typically available for natural persons rather than entities like trusts or estates.
- Financial Circumstances: There should be evidence of financial need or inability to repay debts. Chapter 7 bankruptcy is often suitable for individuals or businesses without sufficient means to repay their debts.
What Is Involved in a Chapter 7 Bankruptcy?
A Chapter 7 generally takes between 4 and 6 months to complete. There are a few steps involved in completing a Chapter 7 bankruptcy.
The steps involved in completing a Chapter 7 bankruptcy include:
- Consulting with an experienced attorney
- Completing a credit counseling course
- Gathering your financial documents
- Filing for bankruptcy
- Triggering the automatic stay
- Attending the 341 hearing or meeting of creditors
- Completing a financial management course
- Debt discharge
What Is Exempt in a Chapter 7 Bankruptcy?
In a Chapter 7 bankruptcy, you will be allowed to exempt specific property from liquidation. This means that you will be able to keep your property, even if it is worth more than the state's exemption limit.
The types of property you will be able to exempt include:
- Your home
- Car needed for driving to work or to the store
- Tools needed for your job
- Veteran’s benefits
- Your retirement accounts
- Unemployment benefits
- Social security benefits
- Life insurance
- Monetary awards from a personal injury case
- Your retirement accounts
- Certain tax exemptions
- And more…
If you have questions about what property is exempt in a Chapter 7 bankruptcy, a Dubuque Chapter 7 lawyer at Pioneer Law Office can help.
How Does Chapter 7 Compare to Chapter 13?
The primary difference is that Chapter 7 results in a discharge of debts, while Chapter 13 involves a structured repayment plan. Eligibility, asset protection, and the impact on credit vary between the two chapters, making it essential to consult with an attorney to determine the best fit for your unique financial situation.
Have questions? Speak with a Dubuque Chapter 7 bankruptcy lawyer at Pioneer Law Office. Contact us or call (563) 649-4073.
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