Are There Risks With Chapter 7
Some people who are considering filing for Chapter 7 bankruptcy protection are uneasy about creditor claims. However, most Chapter 7 cases dont involve any creditor objections.
Similarly, many people are concerned about losing property in Chapter 7, because they may have heard that the bankruptcy trustee can sell non-exempt property to make partial payment to creditors. Those fears are also usually unfounded. Most people who file for Chapter 7 bankruptcy dont have any non-exempt property. Even when the debtor has some non-exempt property, the value is often low enough that it is not worthwhile for the trustee to pursue a sale.
An experienced bankruptcy attorney can assess the listed debts and assets and fully advise the potential Chapter 7 petitioner about any risks or downsides before the debtor makes a decision about filing.
See also:How Chapter 7 Bankruptcy Works
What Happens To Your Debts And Property In Chapter 7
Chapter 7 bankruptcy means that your unsecured debts are wiped out. Unsecured debts are those such as credit cards, medical debts, personal loans, and utilities, for which you have not assigned any personal property as collateral for the loan. In Chapter 7, the only obligations you are responsible for are secured debts, such as your home or car, which you choose to keep. If you surrender your car or home, those debts are also discharged.
After suffering a loss of employment, Chapter 7 bankruptcy offers a unique opportunity to get back on your feet. You can discharge your unsecured debts, and if you can no longer afford your home or car, you can surrender those items and discharge the debt in your bankruptcy as well.
What Does Filing Involve
First, you must prepare a voluntary bankruptcy petition and in-depth schedules of your assets, liabilities, income, and expenses. You must also furnish proof of income, copies of your most recent tax returns, and confirmation that you’ve participated in credit counseling prior to filing, as required by law.
- When your petition has been filed electronically with the help of your lawyer, an automatic stay will go into effect. This temporary order protects you from further collection attempts and the threat of repossession or foreclosure on your home or other property.
- Between 20 and 40 days, after you file your petition, the case trustee will call a meeting of creditors, which you’ll attend with your bankruptcy lawyer. You’ll answer questions to demonstrate that you understand the potential consequences of filing Chapter 7 bankruptcy. You may also be asked for additional information about your financial situation.
- If there are no objections to your petition or schedules, you should receive your discharge from debt within 90 days following the meeting of creditors. A Chapter 7 discharge is a release from any personal liability for most of your debts, and it prevents the creditors associated with these debts from taking any further collection action against you.
Recommended Reading: How Many Bankruptcies Has Donald Trump Filed
What If You Didn’t Receive A Discharge In The First Case
In most situations, you can file again and receive a discharge in the second bankruptcy if you didn’t receive one in the first matter. But that’s not always the case. Also, you lose the full benefits of the automatic staythe order that stops creditors from collectingwhen you file multiple bankruptcies in quick succession.
The court dismissed the first case
- Unless the court orders otherwise, you can file again. A 180-day waiting period may apply if you failed to obey a court order or appear in the case, or you voluntarily dismissed the case after a creditor filed a motion for relief from the bankruptcy stay.
The court denied your discharge
- You might be able to file again, but you probably won’t be entitled to a discharge of the debts listed in your first case. This is another unusual circumstance wherein you would be wise to seek the advice of an experienced bankruptcy lawyer.
What Are The Time Limits
The type of bankruptcy filed in the previous case determines the time limit between cases. The time starts to run on the date the prior case is filed with the bankruptcy court. The date the discharge was entered doesnât matter.
Chapter 7 bankruptcy â¡ï¸ Chapter 7 bankruptcy: 8 years
This is the longest amount of time between cases required by the Bankruptcy Code. Chapter 7 provides the quickest form of debt relief through a bankruptcy filing and doesnât require the filer to complete a repayment plan before getting their bankruptcy discharge.
Chapter 7 bankruptcy â¡ï¸ Chapter 13 bankruptcy: 4 years
It is possible to file Chapter 13 bankruptcy soon after receiving a Chapter 7 discharge, the filer just wonât be eligible to receive a Chapter 13 discharge in the second case. So, someone who successfully discharges their unsecured debts through Chapter 7 can file a Chapter 13 bankruptcy to pay off tax debts or other types of debt that survived the prior case.
Chapter 13 bankruptcy â¡ï¸ Chapter 7 bankruptcy: 6 years
This waiting period can be waived if you paid back 100% to your unsecured creditors in your Chapter 13 plan and the original case was found to be in good faith. Plus, since a Chapter 13 repayment plan can take up to 5 years to complete before resulting in a discharge, itâs possible to file Chapter 7 bankruptcy about 1 year after receiving a Chapter 13 discharge.
Chapter 13 bankruptcy â¡ï¸ Chapter 13 bankruptcy: 2 years
Don’t Miss: How To File Bankruptcy Yourself In Texas
How Soon Can You File For Chapter 13 After Chapter 7 Bankruptcy
In order to get debts discharged through Chapter 13, you must wait four years after filing a Chapter 7 bankruptcy.
You can file for Chapter 13 before four years if no debts were discharged in the Chapter 7 filing, but if you had debts discharged in Chapter 7 and want to have debts discharged in Chapter 13, you must wait four years.
Which One Should I Choose
Chapter 7 is, by far, the more popular form because its cheaper, quicker and effective at relieving responsibility for debt if you qualify! And thats a big if. You must pass a means test, meaning your disposable income is under the median income in your state. If you dont qualify for Chapter 7, you can always fall back on Chapter 13.
You May Like: How To File Bankruptcy In Wisconsin
Do You Meet The Income Limits For Chapter 7 Bankrutpcy
Understanding Your Options In Oklahoma Bankruptcy
We have attempted to answer the most frequently asked questions about bankruptcy in Oklahoma that our clients have asked us before. We hope this will be helpful.
This is not intended as legal advice because bankruptcy is complicated and depends on the specific circumstances unique to every debtor. If you are considering bankruptcy, call us toll-free at for a free consultation so we can provide legal advice tailored to your specific unique situation. There is no obligation, and the call is confidential.
Read Also: How Many Bankruptcies Has Donald Trump Filed
Chapter 20 Bankruptcy: Filing Another Bankruptcy Before The Time Limit Is Up
The time limits above refer to how long a debtor has to wait to discharge debt through another bankruptcy. If you aren’t looking for another debt discharge, but would like to arrange a plan to manage your remaining debts, filing a Chapter 13 bankruptcy immediately after a Chapter 7 discharge might be an option for you.
Filing for Chapter 7 and Chapter 13 in succession is informally called a “Chapter 20 bankruptcy.” The process of filing for Chapter 13 right after the Chapter 7 discharge process can be complicated, and many courts will not allow a double filing before the time limit is up. An attorney can explain the strategy behind double filing and how it may fit into your specific circumstances.
Reasons To Switch Your Bankruptcy Filing From The Previous Chapter
The type of bankruptcy you file will change your repayment plan, the amount of unsecured debts you owe, and the amount of time the bankruptcy stays on your record. It may make sense to file for a different bankruptcy than you used in your previous case.
A bankruptcy attorney can help you understand the best debt relief options for you. An attorney can’t change the time limits between filing dates, but they can help you decide if switching your Chapter is a smart idea. They can also help you prepare to file as soon as the date is available to you.
You can apply one of these strategies to your second bankruptcy filing:
- Switching from Chapter 7 to Chapter 13: If you pay off unsecured debts during Chapter 7, you can file a Chapter 13 to create a repayment plan to pay off tax debt or other debts that were not discharged during the Chapter 7 filing.
- Switching from Chapter 13 to Chapter 7: If you pay back 100% of unsecured debt to creditors, the six-year waiting period can be waived. In some cases, you only need to pay back 70% of unsecured debt. The first bankruptcy case needs to be in good faith in order to file for Chapter 7.
- Repeating Chapter 13 bankruptcy filing: Some people may repeat Chapter 13 filing to manage student loans or tax debts repayment. These debts cannot be discharged, so they must eventually be paid in full.
Also Check: Can I File Bankruptcy Without My Spouse Knowing
What Are The Federal Bankruptcy Exemptions
Although most states require bankruptcy filers to use state-specific bankruptcy exemptions, Oklahoma law allows you to use either state or federal exemptions. However, you must choose one or the other you cannot use parts of both. If you choose to use federal exemptions when you file for bankruptcy, then you may keep:
- $23,675 of equity in your primary home. This is the homestead exemption you can use it to protect residential real estate as long as you live there. However, this does not extend to investments in rental properties.
- Your vehicle up to a value of $3,775.
- Jewelry valued up to $1,600.
- Household items worth up to a total of $12,625, as long as no single item is worth more than $600. This includes furniture, appliances, clothes, animals, books, etc.
- Tools for your work, including books, valued up to $2,375.
- A total of $12,625 in loan value, dividends or life insurance policy interest.
- All health aids.
Liquidation Bankruptcy Chapter 7 Definition
Chapter 7 bankruptcy is a form of consumer bankruptcy for people who either do not have a regular income, or whose income level is beneath a certain threshold.
The primary purpose of the Chapter 7 filing is to discharge all debts through the liquidation of assets. However, Chapter 7 bankruptcy does not discharge all debts. For example, child support and alimony are not discharged. Most tax debt and student loans are also not affected by the Chapter 7 filing. There is also a presumption of fraud in regard to some credit card debt that would ordinarily be discharged. This would include last minute purchases and charges before filing for bankruptcy. Debts incurred by fraud are not dischargeable.
Chapter 7 bankruptcies involve the complete liquidation of all company assets. It is more often the case that the company has such a large load of debt that there is no alternative to liquidation. When there has been a Chapter 7 filing there is an automatic stay on all collection efforts of most creditors. All operations of the company are put to a halt and there is the appointment of a trustee by the Federal District Court. The trustee will be responsible for the sale of the company assets and disbursement to creditors.
You May Like: Dave Ramsey How Much To Spend On Engagement Ring
When Are Multiple Bankruptcy Filings Abusive
The term abusive bankruptcy filing can refer to a Chapter 7 filing that doesn’t meet the means testthe qualification standard that determines a filer’s right to a debt discharge. But it can also describe a case filed by someone who inappropriately uses the bankruptcy process to evade a creditor or buy time in a collection action, such as a foreclosure or lawsuit.
Simply put, the court frowns on debtors who file with no intention of following through with the case. Repeat filers face the consequences for using such tactics, such as a lack of protection from collections or the denial of a discharge.
How Do I File For Bankruptcy In Oklahoma
Filing for bankruptcy is a complex process that requires the attention of a skilled Chapter 7 attorney.
First, we want to ensure that filing for Chapter 7 bankruptcy is the right solution for your financial problems. This is a big decision that can lead to relief from debt and collection attempts should you make the decision in your best interest.
Chapter 7 bankruptcy may be right for you if:
- You have had your wages garnished
- You are being harassed by creditors regularly
- You have received aforeclosureor repossession warning
- You struggle to make your payments each month
If this is you, filing for bankruptcy may be your best option. Be sure to enlist the help ofour trusted bankruptcy attorneys in Oklahoma.
Do you have overwhelming debt? Filing for Chapter 7 may be your answer.Contact our Chapter 7 bankruptcy attorney online or call our Edmond law office today at!
Recommended Reading: How Many Bankruptcies Donald Trump
When Do I File Chapter 7 Bankruptcy
There are several factors that you need to consider in filing Chapter 7 bankruptcy. The following criteria can indicate that Chapter 7 may be the right solution for you:
- Your monthly income is below the median level in your state.
- You have little to no disposable income.
- Your debts amount to more than half your annual income.
- It will take five years to pay your debts.
Get More Details Answers To Your Questions And Free Advice
So many aspect of Oklahoma bankruptcy are dependent upon your specific situation. We know this. That is why we offer a complimentary consultation. We will answer all of your questions and let you know whether bankruptcy is indeed a good option and the next steps given your circumstances. Call to set up a free meeting. You can also reach us via our website contact email, and we will be in touch.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
Read Also: Chapter 7 Falls Off Credit Score
Will I Lose All My Property In Chapter 7
In the majority of cases handled by our firm, the clients lose no existing property. Under Chapter 7, you are entitled to keep property which is protected under Oklahoma law. A few examples of Oklahomas exemptions are: unlimited equity in Oklahoma homestead as long as the lot is 1 acre or less inside city limits $7,500.00 in equity in 1 automobile household goods and furnishings qualified retirement accounts and $4000.00 in clothing. Examples of non-exempt property are mineral interests, stamp or card collections, bank or stock accounts that are not qualified retirement plans.
Our lawyers will work with you to determine what property you have and you will know before you file if any of your property is at risk.
How To File A Motion To Extend The Automatic Stay
If you want to extend the automatic stay, you must file a motion with the court. In your motion, you’ll explain why your previous bankruptcy was dismissed and why the court should extend the stay in your current case. You’ll have to prove that you filed the subsequent bankruptcy in good faith .
The specific procedures for filing a motion to extend the automatic stay depend on the rules in your jurisdiction. But the following are typically the most common steps you must take:
Find and complete the appropriate forms. Each bankruptcy district has forms for specific motions and notices. Check with your local bankruptcy court to find all paperwork related to motions to extend the automatic stay. But be aware that your jurisdiction may not have a standard form to fill out. In that case, you will have to create the motion and declarations. You can find your court’s website using the Federal Court Finder tool.
Obtain a hearing date and file the motion. In most cases, you will need to obtain a hearing date from the court before filing the motion . Keep in mind that the filer must complete the hearing before the stay expires, so typically you must file your motion immediately after filing your case. You’ll tell the court why your first bankruptcy was dismissed and explain why this case is filed in good faith. Then you’ll serve the paperwork on the bankruptcy trustee and your creditors .
Recommended Reading: Diy Bankruptcy Chapter 13