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Key Facts You Must Know About Chapter 7

Before starting any type of bankruptcy process, you must make sure you gather all of the facts. Ask as many questions as possible. Consider all of your options. Being informed makes the process go smoothly and helps you avoid mistakes.

Facts About Chapter 7

To that end, here are a few key facts about Chapter 7 bankruptcy:

  • There is a means test. If you have an income, you can earn too much to qualify.
  • It stays on your record for 10 years.
  • You do not use a repayment plan, but you do pay off at least some of the debt. This is done by liquidating assets.
  • Not all assets have to get sold. Many are exempt. You will probably lose property, but don't assume you'll lose everything.
  • You do have to go to credit counseling. Refusal to go means the bankruptcy petition will get denied.
  • As the above shows, bankruptcy can get denied. Do not assume it will go through just because you want to use it.
  • Some debts cannot get discharged. For instance, maybe you owe child support. Bankruptcy can't eliminate it.
  • There are other options. Chapter 13, which does use a repayment plan, is a popular one.
  • You have to fully disclose everything in bankruptcy, such as assets, debts, income and the like.
  • Bankruptcy is typically going to generate an automatic stay on other financial court cases. For instance, it can pause a foreclosure until the bankruptcy case finishes.

This is not all you need to know about bankruptcy, but it can help you get started. Make sure that you take the time to look into exactly what steps you'll need to take.

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Get To Know David & Robert

  • David  Alan Ast Photo
    David Alan Ast
    Firm Partner David Alan Ast has more than 25 years of experience helping people throughout northern New Jersey get a fresh start and move forward with their financial lives. He is committed to protecting the rights of his clients seeking debt relief.
  • Robert L. Schmidt Photo
    Robert L. Schmidt
    Firm Partner Robert L. Schmidt earned his Bachelor of Arts in Business Administration and Finance from Stockton State College in 1990. Three years later, he earned his Master’s degree from Rutgers University School of Business in Camden with a major in finance. Robert then acquired his J.D. from James E. Beasley School of Law at Temple University in 1997.
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