Law Office of James B. Cronon, LLC
Bankruptcy under Chapter 7 of the US Code allows debtors relief from creditors through liquidation of assets.
- You must identify all of your debts and all of your assets to the Bankruptcy Court.
- You are allowed a certain amount of exemptions for your assets, which identify them as items that the Bankruptcy Court cannot seize - in the majority of cases, this usually constitutes everything you own.
- Anything beyond the exemptions may be surrendered to a Trustee of the Bankruptcy Court, who will liquidate the assets, and pay creditors from the proceeds.
After filing, most have all of their debts discharged (meaning you no longer have to pay them) after 6 months or so.
COMMON MYTH: "I won't be able to keep my house or my car if I file for Chapter 7!"
FALSE! Provided that you are current on your payments, and can demonstrate to the court that you have enough income to cover the cost, you will be allowed to reaffirm those debts, and continue to keep paying monthly.