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Saturday, March 14, 2015

What is Chapter 7 Bankruptcy?

Chapter 7 is a form of bankruptcy that allows an individual to make a fresh start by legally eliminating, or "discharging", debt. Filing a Chapter 7 bankruptcy can eliminate most, if not all, or your debts. It is a quick and powerful tool to put an end to financial stress, release financial obligations for unwanted real or personal property, and stop harassing creditor phone calls.

While Chapter 7 is a liquidation bankruptcy, individuals are allowed to claim certain assets and properties as exempt. Most often the available exemptions allow individuals to retain assets and properties they wish to keep. When exemptions are insufficient for keeping desired assets, individuals can pursue Chapter 13, which allows for significant debt elimination but does not involve liquidation.

By filing a Chapter 7 you can eliminate such debts as:
  • Credit cards
  • Personal/unsecured loans
  • Debt which forms the basis of judgments and garnishment
  • Medical bills
  • Past due utility bills
  • Loan deficiency debt from repossessions and foreclosures
  • Mortgages
  • Auto loans and leases
  • Qualified income tax debt
  • Overpayment of benefits associated with social security or unemployment compensation
The above list of debts that may be subject to a Chapter 7 discharge is not exhaustive. To find out if a debt you owe is dischargeable, call our office for a free phone or in-person consultation - 616.389-0629.

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