Law Office of Jason A. Nordsell
Law Office of Jason A. Nordsell

Chapter 7 Bankruptcy: Total discharge of debts

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.

  • Day 1: All information and documents are gathered, all court-required courses are complete, and you have paid all fees and costs.
  • Day 1 - 20: After filing, you must complete an additional court-required course on debt management.
  • Day 20 - 40: Meeting with Trustee - mandatory attendance, and will cover the information and documents you submitted to the court.  We will prepare you for this meeting.
  • Day 60 - 90: A discharge order is sent to you, wiping out your dischargeable debts.  We will notify all 3 credit bureaus of your discharge.

 

Read More:

 

Chapter 13 - Discharge after payment plan

 

Alternatives to Bankruptcy

 

Fees

 

Main Bankruptcy Page

Contact Us

Principal office located in Addison, Texas

 

If you have questions or want to schedule a consultation, please fill out the contact form.  Your email will be sent directly to an attorney and responded to within one business day.

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