The following applies to individuals, not businesses:
In a Chapter 7 bankruptcy, subject to exemptions (like your homestead, etc.), a debtor's property is liquidated (sold) and the proceeds are given to their creditors. All unsecured debts are discharged; some debts or liens are not discharged, however, such as a mortgage lien, child support, or spousal support.
A Chapter 7 bankruptcy stays on a debtor's credit report for 10 years (as opposed to 7 in Chapter 13), so a debtor considering bankruptcy must weigh the relief from current debt against the difficulty in obtaining new credit. If your credit has already been impacted by late payments or high debt, however, bankruptcy may not make it that much worse, and may even improve your credit score.
You must qualify for a Chapter 7 bankrupcty by showing the court that you are unable to repay some or all of your debts through a Chapter 13 bankruptcy payment plan. In other words, if you have less than a certain amount of disposable income (determined through "means testing"), the law will allow you to discharge all of your debt, otherwise the only bankruptcy option is a discharge of debt through Chapter 13.
Contact Us to discuss your situation and find out what your options are. It is free, there is no obligation, and we can speak over the phone.
Timeline of a typical Chapter 7 Bankruptcy, from filing to discharge
Most cases take around 90 days to complete after filing. The timeline below assumes all information and documents submitted to the court and trustee are accurate and complete, and no objections are made by the trustee or your creditors.
Chapter 13 - Discharge after payment plan
Principal office located in Addison, Texas
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