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Chapter 7 Bankruptcy Lawyer
Chapter 7 is the most common form of bankruptcy. In theory it is a liquidation proceeding in which the debtor's non-exempt assets, if any, are sold by the Chapter 7 trustee and the proceeds distributed to creditors according to the priorities among creditors established in the Bankruptcy Code. In practice 93.7% of all chapter 7 proceeds are no asset cases. In New York in January 2011 the exemption structure was changed to allow individuals to keep virtually all their assets. An exemption is a waiver of the trustee’s rights to take property. It is important to have a good exemption review before a chapter 7 is filed. Missing something is costly in a chapter 7 more today than ever.
As a chapter 7 bankruptcy lawyer and bankruptcy law firm, we have a good track record of helping consumers keep their homes, their cars, pension plans and bank accounts out of the hands of their creditors and the chapter 7 trustee. Although past performance is no indication of future success, we have many satisfied clients. Not everyone is benefited to the maximum extent by a chapter 7. We aim to get only the best result and that often requires not taking the easy chapter 7 path, but instead doing more work on the attorney’s end and filing a chapter 11, chapter 13 or even a chapter 12. Each chapter has a different set of standards.
The main obstacle to filing a chapter 7 is the standard known as the means test. It is just an income comparison between the client’s monthly income for six months and the average national income or median income. Simple except it is not. The chapter 7 test is so complicated that every day I see clients who were turned away by attorneys that just don’t understand how it works or can’t figure out how to get around it. Moreover, anyone close to the line is going to have more difficulty filing then those far below or far above. Median income chapter 7 debtors need the absolute best representation possible.
What do you need to file chapter 7?
1. Proof of the last six months income paid from the month prior to the filing to the first day of the sixth month. In other words if you file in August, you need February 1 through July 31. You also need the last two months pay stubs including the month you file. I know seems redundant but it is not quite.
2. The last six months of bank statements. The trustee looks for assets and what are referred to as preferences. The lawyer needs to understand this concept. You as the client need to supply current information right up to the filing so you don’t have a problem later on in the chapter 7. A chapter 13 in more forgiving in this regard, but you no longer have an absolute right to just change chapters.
3. The chapter 7 trustee will ask to see titles to cars and deeds to houses. He is looking for a mistake made by you or your lender that can be exploited in the chapter 7 proceeding. Your attorney will want to look at these to make sure that filing a chapter 7 is right. A title mistake will mean that you will benefit more from a chapter 13 or chapter 11.
4. Tax returns will be necessary. The chapter 7 or chapter 13 can look at up to four years of taxes without showing any need; however most chapter 7 trustees only ask for the last two years. The IRS can block the filing of a chapter 7 or chapter 13 in any case where returns have not been filed; this doesn’t mean you need to pay the taxes, it is only required that you filed the tax returns. In a chapter 7 proceeding some taxes may be forgiven. It is important that your attorney know the rules on tax forgiveness in bankruptcy. The attorney should also know how to obtain lost or missing returns from the IRS.
5. You need to supply current information on your creditors. In most cases a credit report is helpful, but a full history is better and more reliable. Our office obtains these regularly for clients. You also need to tell the attorney about creditors such as doctors, dentists, relatives and friends. Hiding creditors is one of the worst things you can do and you must swear that you did not.
The chapter 7 trustee may ask for other or additional information. In most case this will be at the chapter 7 trustee meeting. You are required to attend at least one meeting with the chapter 7 trustee unless your appearance is waived by the bankruptcy judge.
Ultimately if everything is done right you get what is called a discharge usually in about five months from the time you file. The discharge is important, but the date of the filing is when the creditor calls stop and when the time begins to run for all the good things that come after bankruptcy like better credit and a fresh start on life.
We Can Save You Today; Make the Call, We’ll Save You From Repossession and Foreclosure
If you have questions or concerns and want to speak to a Chapter 13 bankruptcy lawyer, please call our law office today, or contact our bankruptcy law firm via the Internet. For your convenience, we have two office locations for in-person consultations.