What Exactly Is A Chapter 7 Bankruptcy? Is This Just For Individuals Or Can A Business File Chapter 7 As Well?

Chapter 7 bankruptcy is intended for use by individuals.

What Type Of Debt Is Typically Going To Be Dischargeable In A Chapter 7 Bankruptcy?

Consumer debt will typically be the primary debt dischargeable under chapter 7. So, for the most part, that would be credit cards, revolving debt, medical debt, and any judgments that the parties are facing.

What Are Some Of The Most Common Types Of Debts That Americans Are Facing Right Now That Is Putting Them In A Position Of Having To Consider Bankruptcy?

Credit card and medical debt are the two primary types of debt faced most commonly by Americans.

Since COVID, In Terms Of Job Loss Across The Country, What Have You Noticed As Far As Have Bankruptcies Gone Up, Gone Down, Stayed The Same And Where Do You See This Heading For 2022?

I haven’t seen a significant uptake in bankruptcies since the start of the pandemic. I have colleagues that were banking on the increase, and they’ve remained relatively slow. The stimulus held the bankruptcies at bay, so I’m not seeing many people coming in because they’ve lost their job; maybe two or three but not the amount that we thought we were going to get. Still, since it is difficult to predict, it depends on what our government can do regarding stimulus. If the stimulus ends fairly quickly, I think we’d probably see an uptick in bankruptcies in 2022.

If Someone Sees Bankruptcy On The Horizon, Is It Best To Contact A Bankruptcy Attorney Now, Would That Be Helpful Or Should They Wait Until They’re Actually In A Position Where They Should Be Filing?

If you see a bankruptcy on the horizon, it is probably best to contact somebody now because bankruptcy planning sometimes has to be put in place early. For example, sometimes, the clients may have sold their car or transferred some assets because they were trying to move money around. Depending on how they did it, there might be a waiting period to safely file them without the bankruptcy court going back and flagging previous actions. Therefore, it is always best to consult early so you do not find yourself stuck.

What Type Of Debt Is Not Forgiven In A Chapter 7 Bankruptcy?

The most significant type of debt not discharged under chapter 7 bankruptcy would be tax debt. Some tax debt can be forgiven depending on how old it is and a few other factors. But, generally speaking, the most significant things that I think surprise people are that they can’t discharge money owed to the government, IRS, tax, or student loan debt.

What Is Happening With Student Loan Debt? I Hear Murmurings Of Potential Forgiveness, Or Potential Inclusion In Bankruptcy. Is That Anything Anyone Should Be Looking Further Into At This Point?

I don’t believe student loan debt forgiveness is coming close to fruition anytime soon. Still, if they were to do anything, I suspect rather than doing complete forgiveness, what they might do is change the bankruptcy code and allow them to be dischargeable in bankruptcy so that the people who qualify can get them forgiven.

What Assets Will I Be Able To Keep In Chapter 7, Or Will I Lose Everything?

There is a whole list of assets in Arizona that you’re allowed to keep when you file bankruptcy. Some of the main ones would be if you own a home with less than $150,000 of equity in it, you’d be allowed to keep it. If you own a vehicle with less than $5,000 of equity, you’re allowed to keep it. And generally speaking, your regular household goods are allowed to be kept. The only kind of exception for that would be if somebody is an art collector and they’re collecting lots of expensive art or jewelry, which may have to be turned over. But, still, generally speaking, all your household goods will be safe.

What Is Chapter 13 Bankruptcy?

Chapter 13 bankruptcy is an income earner’s bankruptcy. To qualify for chapter 7, you have to make less than a certain amount of money per year. So for everybody who makes more than that, they can file for bankruptcy in chapter 13, and you end up making a monthly payment to the bankruptcy court for 60 months, but it is typically a whole lot less than what you’d be paying back to your creditors. So after five years, you’ve paid the money in the bankruptcy court, and then you’re completely forgiven for the rest of your debt.

Who Can File Or Qualify For Chapter 13 Bankruptcies? What Requirements Must Be Met?

To file for chapter 13 bankruptcy, you must show that the bankruptcy court that you have the ability to pay the payment, and that’s the only qualification. You have to be earning money to qualify, and you can’t earn too much.

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