$749 Attorney Fee for a Chapter 7 Bankruptcy
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Why Chapter 7

Why Chapter 7

Most people file a chapter 7 bankruptcy because they need to avoid their bills, judgments, garnishments, or taxes (to be precise, taxes more than 3 years past due). At the same time, these people want to keep all their assets. To keep their car and home, these people must bring the monthly payments current and keep them current.

On the day the chapter 7 bankruptcy is filed in court, a notice of bankruptcy and temporary restraining order are mailed to all creditors. The temporary restraining order restrains (stops dead) all creditor complaints, telephone calls, letters, wage garnishments, foreclosures, and court proceedings. No more angry telephone calls or letters! No more stress! These people get most of the benefit of the chapter 7 bankruptcy the day the chapter 7 bankruptcy is filed in court!

One general rule is that people get to keep whatever they own that most other people typically own. That includes a house, bank account, up to a month of wages in their pocket, photos, videos, art work, car, furniture, knicknacks, clothing, electronic gizmos, work tools, pets, 401k, jewelry, etc.
Another general rule is that people don't get to keep unique items that almost no other people typically own. That would include a custom engraved and jeweled pearl handled revolver allegedly owned by General George Armstrong Custer. But come to think of it, most people typically don't own a custom engrave and jeweled pearl handled revolver allegedly owned by General George Armstrong Custer. If these people are not going to be allowed to keep something they own, I will warn them ahead of time so they can sell the item before doing their bankruptcy. That way these people won't lose it.

The temporary restraining order provides most of the benefits of a bankruptcy. Three or four months later, at the end of the bankruptcy, the court orders the bills, judgments, garnishments or taxes (taxes more than 3 years past due) discharged and the temporary restraining order permanent. Not more effective, it is already totally effective but now, it is permanent. That’s it, done!

After the chapter 7 bankruptcy, people still have to pay their most recent last three years income taxes, debts owed to the government, alimony, child support, court fines, and student loans. This is so because, generally, a chapter 7 bankruptcy will not defeat government claims or court orders people owe. Also, generally, a chapter 7 bankruptcy does not allow people to keep, 1. their home and a vacation home or, 2. their home and a rental unit.

If there was a home foreclosure in progress that was restrained, it will resume after the three or four months of restraint. If resuming the foreclosure results in the sale of the home and it does not sell for enough money to pay off the mortgage, the chapter 7 bankruptcy excuses these people from having to pay off the amount of the mortgage the foreclosure sale did not pay off (generally referred to as the "deficiency").

The court imposes a household income test that stops some people from filing a chapter 7 bankruptcy. To learn why some people would not qualify for a chapter 7 bankruptcy and maybe how to get around that issue, click means test and pay particular attention to HINT. People who fail the means test and can't do a chapter 7 bankruptcy can do a chapter 13 bankruptcy. For information about chapter 13 bankruptcy, click here WHY CHAPTER 13.

Special rule for people who have previously filed for bankruptcy. People cannot do a chapter 7 bankruptcy until 8 years after their previous bankruptcy ended (not started, ended). However, these people can help themselves by starting a chapter 13 bankruptcy and waiting until the 8 year anniversary after their previous chapter 7 bankruptcy ended and then convert the chapter 13 bankruptcy to a chapter 7 bankruptcy.

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