Eliminate Debt

Chapter 7 allows you to eliminate most of your debts while keeping your property.

Chapter 7 stops garnishments, lawsuits, foreclosures, repossessions, tax levies, student loan garnishments, collection letters and phone calls.

Here are some facts about Chapter 7:

1. Eliminate Debt: Chapter 7 wipes out most debts including credit card debt, medical bills, car loans and mortgages. Chapter 7 can even eliminate old income tax debt.
2. Keep Property: Chapter 7 allows you to keep your property in most cases, however some property can be lost. You should consult an experienced attorney prior to filing a Chapter 7 to ensure that you receive correct information regarding which property you can keep. An attorney knowledgeable about bankruptcy laws can tell you if a Chapter 7 will work for you.
3. Get out of car loans: If you have a car loan and you want to get out of the debt, a Chapter 7 might be ideal. With Chapter 7, you’ll have to return the car, but the debt will be gone.
4. Eliminate Mortgage Debt: If you recently lost a home to foreclosure, or if you want to get out from under your home loan, Chapter 7 will eliminate the debt. You’ll have to return the home to the lender, but the debt will be gone.
5. Stop garnishments and Lawsuits: Chapter 7 will stop all garnishments, including those for taxes and student loans.
6. Fast and Easy Process: Chapter 7 takes only about 120 days to complete in most cases. You must take a credit counseling course before and after your case is filed. These courses may be taken on the internet or by telephone. Once filed, you’ll have to go to court for a five-minute hearing. Creditors rarely appear at these hearings.
7. Limitations on Chapter 7: You can’t eliminate all debts in a Chapter 7 case. Student loans, most taxes, child support and alimony survive Chapter 7. However, eliminating your other debts in a Chapter 7 leaves you more money to make your payments on student loans, taxes and child support.