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Which Type Of Bankruptcy Is Sometimes Called Straight Bankruptcy

What Can I Keep When I File A Chapter 7 Bankruptcy

Types of Bankruptcy

Under Chapter 7, what an individual may retain depends on a number of different factors. Our lawyers will help you determine which assets are protected from liquidation by the Chapter 7 trustee. Typically, individuals who do not have a homestead are permitted to use what is known as a wild card exemption which entitles you to an addition $4,000 of personal property plus $1,000 in personal property already afforded to you for a total of $5,000.00 in personal property. Individuals who own a home may be more limited as they will not receive the wild card exemption when they exempt their homestated property under s. 4, Art. X of the State Constitution.

Have More Questions About Chapter 7 Or Chapter 13 Bankruptcy Contact Us Today

If you think that you may need to file for bankruptcy but have more questions about what that entails, which Chapter you should file for, and if it is truly the best option for you, thencontact us. We can help explain what bankruptcy in Hawaii is like and how the process works. After that, we can get started on helping you take your life back.

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Bankruptcy can be difficult to navigate, but our team is ready to help guide you. Read our frequently asked questions or reach out to us directly to schedule a free consultation for more information.

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Welcome To The David Mcloon Bankruptcy Law Firm

Were the only bankruptcy lawyers that guarantee our services. If youre not happy with us for any reason, just let us know and we will agree to refund your payments until we draft your petition. No questions asked.

Were not bankers, so we dont keep bankers hours. Well meet you at any time thats convenient for you.

We dont work by the hour. We charge a flat price to handle your bankruptcy from start to finish. That price will never go up, and you never have to worry about a bankruptcy being dragged out and incurring more hourly legal costs.Most people would be reluctant to set up payment programs for someone filing bankruptcy, but we understand your situation, and want to help. We have options to begin your bankruptcy on affordable payment options.

We understand that you will have questions during the bankruptcy process, important concerns that we want to help with. We promise to call you back the same business day, and in most cases within 2 hours. Well also give you a cell phone number so you can reach one of our lawyers even when the office is closed, so you never have to sit worrying, waiting days to be called back.

We dont charge you anything for your first meeting with us. It is important to us that we can help you, so we prefer to discuss everything involved in the bankruptcy process, and make sure bankruptcy is right for you before discussing any type of fees.

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Chapter 7 Compared To Chapter 13

People who do not pass the Chapter 7 means test have the option to file for Chapter 13 bankruptcy instead. Chapter 13 requires you to pay back debt over time using a repayment plan under which installment payments are made to creditors over three to five years.

You can decide that Chapter 7 is not right for you at any time. Changing to Chapter 11, 12, or 13 filing is allowed as long as:

  • You are eligible under the rules for those chapters
  • Your case was not already converted to Chapter 7 bankruptcy from one of the other chapters
  • You do not try to change the case repeatedly

The Meeting Of Creditors

Which Type Of Bankruptcy Is Sometimes Called Straight ...

When a Chapter 7 bankruptcy is filed, the court will issue notice of a debtor’s “meeting of creditors,” often referred to as the “341 meeting” after the bankruptcy code that provides for it. This notice is also sent to all the creditors that are listed in the bankruptcy documents.

As the name suggests, any creditor can appear at this meeting and ask the debtor questions about their bankruptcy and their finances. In reality, the only creditors who typically may appear are auto lenders to ask what you intend to do about your car payments, if you have them.

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What Is Chapter 7 Bankruptcy

Chapter 7 bankruptcy â also known as liquidation or straight bankruptcy â is a process in which you are able to ask a bankruptcy court to wipe out most of your debts so you can start over. A judge will review your case and accept or deny the request.

If approved, the court puts an “automatic temporary stay” in place that stops creditors from trying to collect payments or taking action such as wage garnishment, repossession, or foreclosure, while the bankruptcy case is pending.

Chapter 7 bankruptcy provides immediate relief to people in serious debt however, there are some drawbacks as well.

Filing for bankruptcy protection negatively affects your credit score for many years, and you could lose certain nonexempt assets that are sold, or “liquidated,” to repay your creditors. Most assets, though, are considered exempt and are not subject to liquidation.

The liquidation process generally involves three steps:

  • Your nonexempt assets are sold
  • Your creditors and lenders receive payment from the sold property
  • You are freed from most remaining unsecured debts and can start over
  • Keep in mind your student loans, tax debt, and other types of secured debt are not “dischargeable,” and you will still need to repay these unless you are able to show extraordinary circumstances. Most consumer debt, though, like medical bills and credit card debt, are dischargeable.

    Exceptions To The Means Test Requirement

    Most but not all people who file for Chapter 7 bankruptcy protection must pass the means test in order to qualify.

    The following filers may not have to pass the means test after completing the Statement of Exemption from Presumption of Abuse Under §707 form:

    • Disabled veterans that file to eliminate debt incurred while on active military duty
    • Filers with debt that primarily came from operating a business
    • Members of the National Guard or military reservists who are called to active duty before filing

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    Chapter 1: Business Reorganization

    For a business, bankruptcy does not necessarily mean ruin. If it did, there would be three fewer major air carriers , two fewer car manufacturers , and no Marvel Universe.

    Chapter 11 filings which surged during the coronavirus shutdown in 2020 allow troubled businesses to protect themselves from creditors while they reorganize their business operations, debts, and assets.

    If all goes well, the business re-emerges a few years later oftentimes smaller, sleeker, more efficient, profitable and creditors have enjoyed a more satisfactory return than they would have if the business ended operations and was liquidated.

    Sometimes, however, Chapter 11 buys only time. The reorganization plan fails, and liquidation results. The 2011 demise of Borders Books, once the nations No. 2 bookseller, is a prominent example.

    A Chapter 13 Filing May Be Right For You If:

    Bankruptcy Basics Part 2: Types of Bankruptcy
    • You want to catch up on certain debts that are past due
    • You are not eligible to file for Chapter 7 under the Means Test of the Bankruptcy Code
    • You want to catch up on debts that would not be dischargeable under Chapter 7
    • You want to be able to hold onto property that would be non-exempt under Chapter 7
    • You have a stable, regular source of income and/or
    • You owe tax debts that you want to pay off without interest or penalties.

    The attorneys at Atlanta Bankruptcy Associates understand the advantages and disadvantages of the different types of bankruptcy processes, and they can help you chart the course that is best for you and for helping you to achieve a brighter financial future.

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    Chapter 7 Bankruptcy Vs Chapter 11 Bankruptcy

    Because there are several different bankruptcy filing types, it’s important that you’re choosing the best option for you and your future financial situation. Consider the key differences between Chapter 7 and Chapter 11 bankruptcy.

    Chapter 7 Bankruptcy
    Known as “liquidation” or “straight” bankruptcy Known as “reorganization” or “rehabilitation” bankruptcy
    More often used by individuals to help repay debts More often used by businesses to help repay debts while continuing operations
    Process generally takes four to six months Process can last years

    Qualifying For Chapter 7 Bankruptcy

    Over the years, we have found that the vast majority of people who want to file a Chapter 7 Bankruptcy case qualify to do so. For those who qualify, Bankruptcy is a constitutional right. Do not be misled by media reports which state that it is very difficult to file Chapter 7 Bankruptcy.

    Even if you are in the small group of people who do not qualify for Chapter 7 Bankruptcy, you may still qualify for Chapter 13 Debtors Court.

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    Can I Call Alliance Again For Help In The Future

    A. Yes. Our counselors are always happy to assist you with questions you might have in budgeting, financial education, etc.


    How Long Does Bankruptcy Take

    Which Type Of Bankruptcy Is Sometimes Called Straight ...

    A: The length of time to complete the bankruptcy process will depend on what type of bankruptcy you file and on your particular situation. A Chapter 7bankruptcy can typically be completed in three to six months. A Chapter 13bankruptcy requires repayment plan, which are typically three to five years.

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    Chapter 7 Vs Chapter 1: Key Differences

    Like Chapter 7, Chapter 11 requires the appointment of a trustee. However, rather than selling off all assets to pay back creditors, the trustee supervises the assets of the debtor and allows business to continue.

    Its important to note that debt is not absolved in Chapter 11. The restructuring only changes the terms of the debt, and the company must continue to pay it back through future earnings.

    If a company is successful in Chapter 11, then typically it will be expected to continue operating in an efficient manner with its newly structured debt. If it is not successful, then it will file for Chapter 7 and liquidate.

    Chapter 7 Bankruptcy Explained

    Chapter 7 bankruptcy is a way for individuals who cannot afford to pay their creditors to obtain debt relief. This type of bankruptcy is sometimes referred to as a straight bankruptcy or liquidation bankruptcy. In Chapter 7 bankruptcy, debtors list all of their assets on schedules filed with the bankruptcy court. Values are assigned to these assets. Each state has a group of laws called exemptions, which can be used to protect property from creditors. Debtors use these exemptions to protect their interest in the assets listed in their schedules.

    Property that is protected by an exemption is considered exempt from the bankruptcy estate. This means that the trustee has no right to seize the property. However, if the property cannot be exempted then the Chapter 7 bankruptcy trustee can seize the property, liquidate it, and pay the proceeds to the creditors. Fortunately, in Texas we have very good exemptions. Most Chapter 7 bankruptcy cases result in no liquidation of assets.

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    Differences Between Chapters 7 11 12 & 13

    What is the difference between filing bankruptcy under Chapter 7, under Chapter 13, and under Chapter 11 of the Bankruptcy Code?

    Chapter 7:

    This is a liquidation bankruptcy, sometimes called straight bankruptcy. The principle advantage is that the debtor comes out without any future obligations on his discharged debts. However, bankruptcy does not wipe out most mortgages or liens. If a debtor wants to keep an item which is security for a loan, he/she must continue these payments. If the debtor wants to discharge that car loan, then he/she must surrender the car to the creditor that holds the lien.

    The fact that the term liquidation is used in describing a chapter 7 can be misleading. A chapter 7 bankruptcy trustee can only liquidate nonexempt assets owned by the debtor. In Mississippi, most consumer chapter 7 filings are what we call no asset cases because the debtor owns no nonexempt assets or such a small amount of nonexempt assets that liquidating those assets would not provide a meaningful distribution to creditors. For an understanding of what is exempt and not exempt, see Exemptions in Mississippi.

    Another type of debt that is not discharged is debt that is reaffirmed by the person filing the bankruptcy. Reaffirm and reaffirmation agreement are terms that are described in the Bankruptcy Glossary.

    Chapter 13:

    Chapter 11:

    Chapter 12:

    The Primary Purpose Of Bankruptcy Protection

    What is Bankruptcy?

    When you file for bankruptcy, your case will be heard in federal bankruptcy court. Filing for bankruptcy protection can give you the opportunity to eliminate and diminish your debts and to start recreating your finances.

    The three leading types of bankruptcyChapter 7, 11, and 13allow you achieve two primary goals:

    • Debt relief or strategic repayment
    • The chance to start over financially

    Overwhelming debt can lead to stress and anxiety and rob you of your peace of mind. Your lawyer can help you explain the specific benefits bankruptcy can provide your family and what your filing options are.

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    Meeting With The Chapter 7 Bankruptcy Trustee

    After the case is filed, the debtor meets with the Chapter 7 bankruptcy trustee. This meeting is sometimes called a 341 meeting or a meeting of creditors. The purpose of this meeting is to allow the trustee an opportunity to question the debtor and to confirm the accuracy of the documents. Creditors are allowed to attend the meeting but rarely do.

    Basics And Eligibility For Chapter 7

    Chapter 7 bankruptcy focuses on liquidating your nonexempt assets, if you have any, to repay creditors before your remaining debt is discharged. The process can get rid of many types of unsecured debt such as credit card debt, medical bills, and utility bills.

    Chapter 7 is the most common of the bankruptcy options available to individuals. Another bankruptcy option available to individuals is Chapter 13, which focuses on debt repayment. Chapter 12 bankruptcy is a relatively new option available to âfamily farmers” and âfamily fisherman.”

    To qualify for Chapter 7 bankruptcy you must meet specific eligibility requirements, including a “means test.” The purpose of the test is to prevent high-income earners from qualifying for Chapter 7.

    You pass the means test automatically if your average monthly income for the six months before filing for bankruptcy is less than or equal to your state’s median income.

    If your income is higher than your state’s median income, you may still pass the means test if it’s determined that you don’t have enough disposable income to pay your creditors after taking into account your income, expenses, and family size.

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    Which Type Of Bankruptcy Is Sometimes Called Straight Bankruptcy And Involves The Liquidation Of All The Non

    Chapter 7 bankruptcy, commonly called straight bankruptcy, comprises about 80 percent of the consumer filings. The most drastic method of settling financial problems, it involves liquidating, or selling, the debtors non-exempt property and possessions and distributing the proceeds to the creditors.

    Chapter : For Municipalities

    Which Type Of Bankruptcy Is Sometimes Called Straight ...

    Sometimes, local governments run into financial problems that cant be solved by some combination of taxes, cuts to services and/or personnel, or floating bonds. In these dire circumstances, these local government entities including cities, townships, counties, school districts, municipal utilities, taxing districts, and any number of other instrumentalit of the state may file for bankruptcy protection.

    The goal is to reorganize and possibly even resize debt. For instance, when Detroit filed for bankruptcy in 2013, city pensioners took a slight hit but a major bondholder got a small fraction of the $333 million it was owed. The storied Joe Louis Arena was demolished, and the site surrendered to a bondholder for construction of a hotel.

    Although Chapter 9 bankruptcies were once a fixture of the American landscape about 680 have been filed since 1937 no city, town, village, or county has filed since July 2013.

    But the century is young.

    Chapter 9 bankruptcies made the news in April when U.S. Senate Majority Leader Mitch McConnell suggested Congress might want to extend bankruptcy protection to states to help alleviate some of the effects of bad management that were exacerbated by the coronavirus shutdown.

    Not unexpectedly, the blowback was immediate. From constitutional scholars. And from politicians Republicans as well as Democrats.

    Anyway, bankruptcy courts are full enough as it stands.

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    Defining Dischargeable And Non

    One of the primary objectives of declaring bankruptcy is to get out from under debt that far exceeds your income. When you file for bankruptcy protection, your accumulated debts will fall into two categoriesdischargeable and non-dischargeable debt. The United States Courts define these types of debt in the following manner:

    • Dischargeable debts are debts that can be partially or completely eliminated through bankruptcy and not require further Additionally, creditors will not be allowed to pursue discharged debts after your bankruptcy is completed.
    • Non-dischargeable debts are debts that cannot be eliminated by filing for bankruptcy. Debts that may be non-dischargeable include divorce settlements, child support payments, taxes, and other debts owed to the government, and debts accrued because of criminal penalties.

    Your lawyer will explain the difference between dischargeable and non-dischargeable debt, which categories each of your creditors falls into, and how the type of bankruptcy you choose will affect the debt you owe. Your lawyer will also explain how the process of filing for bankruptcy protection works.

    For a legal consultation with a lawyer serving Rutherfordton, call


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