This pandemic has taken its toll on everyone. Lack of employment and COVID expenses has overwhelmed many Americans with credit card debt, medical debt, and tax debt, among many others. If you’re facing financial hardship, filing for bankruptcy might be the way to get a fresh start at a secure financial future.

Bankruptcy protection is a right enjoyed by Americans that can provide debt relief and allow us to start over fresh. Chapter 7 liquidation and Chapter 13 reorganization are the most common ones among the different types of bankruptcy. In this article, we’ll discuss the basics of a Chapter 7 bankruptcy along with the pros and cons. If you have any questions about filing bankruptcy and bankruptcy law, get in touch with our experienced Wheeling, West Virginia bankruptcy attorneys today!

Chapter 7 Overview

Chapter 7 of the US Bankruptcy Code lets you liquidate your assets and eliminate your debt. Through this chapter, the court appoints a bankruptcy trustee who sells your nonexempt property to pay off your creditors. After bankruptcy, your debts are discharged, meaning you no longer have any personal obligation to pay them off. 

For more information on exemption of property and the like, get in touch with our experienced Wheeling bankruptcy attorney now!

Can I Discharge All My Debt?

Not all types of debt are dischargeable. You can usually discharge unsecured debts like credit card bills. Here is a list of nondischargeable debt:

  • Most tax debt,
  • Fines for breaking the law,
  • Student loans
  • Debts for causing death or personal injury while driving under the influence,
  • Family support debts like child support or alimony, and
  • Debts you forgot to list in the paperwork.

Your creditors can contest some type of debt and have the bankruptcy judge declare them as non-dischargeable. These debts are: 

  • Debts from breach of trust, embezzlement, or larceny
  • Debts from malicious or willful injury of another person or their property
  • Cash advances or loans worth at least $1,150 taken within 60 days of your bankruptcy filing
  • Luxury services or goods bought within 60 days of filing worth $1,150 or more using your credit,
  • Credit purchases of $1,150 or more for luxury goods or services are made within 60 days of filing.
  • Debts from fraud.

If you’re unsure if your debt can be discharged in the bankruptcy process, contact our Wheeling bankruptcy attorney for help!

Secured Debts vs Unsecured Debts

Secured debts are called that because you secure them with an asset as collateral. Secured lenders put a lien on the asset of the debtor, which allows them to rightfully claim the property through repossession or foreclosure if you fail to pay for the loan. 

Unsecured debts do not require collateral. Unsecured creditors usually cannot force you to pay unless they sue you and obtain a judgment in court. 

Our competent bankruptcy lawyers can discuss your options in dealing with unsecured and secured debts. Get in touch with our Wheeling law firm now for more information!

Reaffirmation Agreement

You can keep the assets for your secured debts, like your house or your car. You do this by signing a reaffirmation agreement, which means you keep paying for that debt despite your bankruptcy petition. If you decide to reaffirm your debts, you’re not allowed to eliminate that debt again for eight years.

You also have to bring your accounts current for all those debts you want to reaffirm, which means if you’ve failed to pay for 3 months, you have to pay those 3 months back before you can reaffirm the debt and keep your property. 

Reaffirming debts are counterproductive to the purpose of a Chapter 7 bankruptcy because its goal is to wipe out your debt. Do this if there’s a certain piece of property that you need to keep. If you need help with reaffirmation agreements, our Wheeling bankruptcy attorneys can guide you through the process. Contact our office now for bankruptcy help!

The Pros of a Chapter 7 Bankruptcy

  • It takes only 3-6 months to receive your discharge, unlike in Chapter 13 which takes 2-5 years. 
  • No minimum debt requirement
  • Your wages are yours to keep even after filing bankruptcy, whereas you use all your disposable income to pay off your monthly Chapter 13 repayment plan
  • Upon the date of filing, the court ordered automatic stay protects you from any efforts to collect your debts, including wage garnishment and lawsuits. 

The Cons of a Chapter 7 Filing

  • If you received a bankruptcy discharge for your Chapter 7 case, you can only file for another one after eight years.
  • Those who co-signed your loans will be stuck with the debt.
  • The automatic stay only temporarily prevents foreclosure, but it does not stop it entirely. 
  • You lose your non-exempt property as it will be sold by the bankruptcy trustee. A Chapter 13 repayment plan lets you keep the property you want. You can protect and keep your assets with a reaffirmation agreement. 

Final Thoughts

We help people who have fallen into debt after losing a loved one, loss of household income, loss of health, or experiencing other overwhelming problems. You may be feeling extremely stressed, but our Wheeling bankruptcy attorney can explain your options to you and help you understand that filing for bankruptcy protection is something many people need to do and benefit from, including famous successes such as Abraham Lincoln, Walt Disney, and Henry Ford.

Are you looking for high-quality legal guidance through a bankruptcy case? Are you looking for a solution to your overwhelming debt? No matter your current financial situation, our Wheeling bankruptcy lawyer is wholeheartedly committed to helping you achieve long-term financial debt relief.

At Thomas E. McIntire & Associates, L.C., we can provide you with the assistance you need to become debt-free. We devote extensive time, energy, and attention to individuals who are pursuing Chapter 7 bankruptcy or Chapter 13 bankruptcy. With a proven record of results, clients can trust in the work that we offer to address their foreclosures and creditor harassment issues.

Relief from debt can be just a tap away! Contact our Wheeling bankruptcy lawyer for a free consultation now!