Chapter 7 (Fresh Start Bankruptcy) In a bankruptcy case under chapter 7, you
file a petition asking the court to discharge your debts. The basic idea in a chapter 7 bankruptcy is
to wipe out (discharge) your debts in exchange for your giving up property, except for “exempt”
property which the law allows you to keep. In most cases, all of your property will be
exempt. But property which is not exempt is sold,
with the money distributed to creditors. If you want to keep property like a home or
a car and are behind on the mortgage or car loan payments, a chapter 7 case probably will
not be the right choice for you. That is because chapter 7 bankruptcy does
not eliminate the right of mortgage holders or car loan creditors to take your property
to cover your debt. If your income is above the median family
income in your state, you may have to file a chapter 13 case. Higher-income consumers must fill out “means
test” forms requiring detailed information about their income and expenses. If the forms show, based on standards in the
law, that they have a certain amount left over that could be paid to unsecured creditors,
the bankruptcy court may decide that they cannot file a chapter 7 case, unless there
are special extenuating circumstances. Call me for a free consultation at (215) 551
7109. Please visit our website for more information
at www.thephiladelphiabankruptcyattorney.com.