Chapter 7 Bankruptcy is one type of bankruptcy that individuals, couples and businesses may file under the Bankruptcy Code. If a business files for Chapter 7 bankruptcy relief, the business closes and the assets are liquidated by the Chapter 7 Trustee. Individuals who file under Chapter 7 are often worried about losing assets because Chapter 7 bankruptcy is commonly known as a liquidation bankruptcy. The truth is that most Chapter 7 bankruptcy cases are “no asset” cases where the debtors discharge most, if not all, debt while keeping all of their assets.
Debtors who wish to file for Chapter 7 bankruptcy relief must meet the income requirements of the means test. The means test examines the debtor’s current monthly income to determine if it is above the state median income. If the debtor’s income is over the stated median, the means test applies certain statutorily allowed expenses to determine if the debtor’s Chapter 7 bankruptcy filing would be considered abusive. If so, the debtor would need to file a Chapter 13 bankruptcy case if he or she cannot successfully rebut the presumption of abuse.
Should I File Under Chapter 7?
Filing bankruptcy under any chapter is something that should not be taken lightly. Trained and experienced bankruptcy attorneys can help you determine if filing bankruptcy is in your best interest and, if so, what chapter of bankruptcy is the best for you to file. As stated above, most Chapter 7 bankruptcy filings are no asset cases in which debtors do not lose any of their assets.
The Bankruptcy Code provides for certain exemptions that protect property from creditors and the court. An experienced bankruptcy attorney uses these exemptions fully to protect the debtor’s property. If you qualify for Chapter 7 bankruptcy relief and your assets are protected by exemptions, you can discharge all or most of your debts so that you can have a fresh start to rebuild and recover from a financial crisis.
How Long Does It Take to File a Chapter 7 Bankruptcy?
Chapter 7 bankruptcy generally takes between four and six months to file and complete provided it is a no asset case. Once your case is filed, you will be required to attend the 341 Meeting of Creditors in 30 to 45 days. The hearing lasts less than 10 minutes and it is conducted by the Chapter 7 Trustee appointed to administer your case. This will likely be the only court hearing you will be required to attend.
Creditors have 60 days from the Meeting of Creditors to file an objection. In almost all cases, no objections are filed and you receive your Order of Discharge once the 60-day deadline has passed. Your case is closed and you are free to continue your life without the overwhelming burden of debt.
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Pioletti & Pioletti is a full service law firm that represents individuals and businesses in a variety of areas of law including criminal defense, family law, bankruptcy and estate planning. With offices located in Eureka and Bloomington, we represent clients through Woodford County and McLean County.
When you need the assistance of an experienced bankruptcy attorney in Illinois, you need to call the compassionate and skilled attorneys of Pioletti & Pioletti. We are dedicated to giving our clients exceptional service to help them overcome the financial problems that is keeping them from enjoying life.
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