Q: What is a Chapter 7 bankruptcy?
A: Chapter 7 is a provision of the Bankruptcy Code, a federal law. It allows the discharge, or dismissal, of most consumer debts, such as credit cards, medical bills, certain court judgments and garnishments, while typically allowing you to keep most of your personal belongings, including your car and home.
Q: Are there any debts that cannot be discharged?
A: In most cases, tax debts, alimony, child support obligations, most student loans, criminal fines, debts related to a drunk driving offense, debts not listed in the bankruptcy petition and some debts incurred within 60 days of filing the petition may not be dischargeable.
Q: Can anyone file a Chapter 7?
A: No. You must qualify for a Chapter 7 bankruptcy based on the amount of your income and the size of your family, under the Bankruptcy Code guidelines. At Level One Legal, we are able to quickly evaluate your situation and let you know if a Chapter 7 is right for you.
Q: Does my spouse have to file bankruptcy if I do?
A: No. But it is important to know that if there is any joint debt, that is, if your spouse is a co-signor on a debt with you, the creditor can legally pursue the spouse for collection of that debt even if you have filed bankruptcy and discharged the debt.
Q: How will filing for a Chapter 7 bankruptcy affect my credit?
A: Although a bankruptcy filing will appear on your credit report for up to ten years, its overall effect is less damaging than a history of delinquent or missed payments and/or judgments. In addition, within about three months after filing a Chapter 7, you can begin to reestablish your credit. Level One Legal will help you understand how to do this.
Q: Will people know that I filed bankruptcy?
A: No, only your creditors and the IRS are provided notice that you have filed bankruptcy. Your employer and even your landlord, if you are a renter, will not be notified of your filing. Although bankruptcy records are public record, it requires specific training to know how and where to look.