Do you lose everything in Chapter 7?

Most Chapter 7 filers don't own expensive items that are at risk. It's incredibly rare for anyone to lose property in a Chapter 7 case . Still, it's important to understand how exemptions work and whether you own any non-exempt property.

Can I keep my savings in Chapter 7?

Filing for Chapter 7 Bankruptcy: The Process If an item of property, an investment, or cash is "exempt" or protected under the bankruptcy exemption laws, you can keep it .

What is the downside of Chapter 7?

Disadvantages to a Chapter 7 Bankruptcy: If you want to keep a secured asset, such as a car or home, and it is not completely covered by your bankruptcy exemptions then Chapter 7 is not an option. The automatic stay created by filing Chapter 7 Bankruptcy only serves as a temporary defense against foreclosure.

What does Chapter 7 wipe out?

A Chapter 7 bankruptcy wipes out mortgages, car loans, and other secured debts . But suppose you don't continue to pay as agreed. In that case, the lender will take back the home, car, or other collateralized property using the lender's lien rights.

What percent of Chapter 7 bankruptcies are dismissed?

The good news is that if you – or the attorney you hire – gets the paperwork right and the case moves through the court to the point where debt discharge is determined, the U.S. Bankruptcy Courts says that 99% of Chapter 7 cases succeed.

Do you lose all credit cards in Chapter 7?

You'll likely have to give up all of your credit cards if you file for Chapter 7 bankruptcy , but you can start rebuilding your credit once your case is closed.

Will I lose my tax return in Chapter 7?

Your tax refund will be part of your bankruptcy estate . A tax refund based on the income you earned before filing for bankruptcy goes to the estate. Note: Most trustees are concerned about tax refunds owed to the filer after the tax year ends, not before. You keep the full refund.

What Will I Lose if I File Bankruptcy? | Farmer & Morris Law (2024)

Most people who file bankruptcy are able to keep all of their assets. Filing for bankruptcy may seem like an overwhelming experience. However, a lawyer from our firm can help you through the process.

Financial difficulty affects individuals, families, and businesses. A lawyer from our team can review your finances and determine the best option for moving forward.

Filing bankruptcy is an option that can lead you toward a better path of financial stability. At Farmer & Morris Law, PLLC, our team understands the uncertainty and anxiety you feel regarding your situation. We stand ready to assist you through this troubling time and help you head toward a brighter future.

Understanding Bankruptcy

As you consider bankruptcy, it is important to understand what the term means. Bankruptcy is a court proceeding in which a judge determines whether to discharge debts so that the debtor no longer has to pay them.

The process of determination involves examining the assets and liabilities presented before the court. Bankruptcy is typically filed under Chapter 7, Chapter 11, or Chapter 13.

Chapter 7 Bankruptcy

Individuals or businesses that file Chapter 7 bankruptcy generally sell nonexempt assets to repay unsecured debts. Nonexempt assets can include items like stocks, valuable collections, or a second home.

Most people filing for Chapter 7 bankruptcy do not own nonexempt assets. Assets like a vehicle or tools for employment—up to a certain value—are typically protected under Chapter 7 bankruptcy.

Chapter 11 Bankruptcy

This type of bankruptcy is most common among businesses looking to re-organize. Chapter 11 bankruptcy allows businesses to develop a plan that will help them cut costs and find ways to increase revenue.

The attractive feature of Chapter 11 is that businesses can continue to operate while under court supervision.

Chapter 13 Bankruptcy

Chapter 13 bankruptcy, also known as the wage-earner’s plan, involves establishing a workable plan to restructure and pay debts over a period of time. In return, the court allows individuals and businesses to keep all their property, including nonexempt assets. Chapter 13 bankruptcy is an option for those who make too much to qualify for Chapter 7 bankruptcy.

These are just several of the more common types of bankruptcy filed by individuals and businesses. If you are dealing with financial difficulty, there are legal options available that can help steer you toward a brighter and more successful future.

Filing for bankruptcy is an important decision. Because it is one involving the courts, it is a decision to not take lightly. Bankruptcy filings must meet the criteria required by law. If you are confused about your options for bankruptcy, a lawyer from Farmer & Morris Law, PLLC, may be able to assist you.

We are passionate about obtaining the best result.

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The Emotional Aspect of Bankruptcy

Financial stress and the decision to file for bankruptcy is emotionally difficult for most people. Many view it as a form of defeat that requires letting go of something that took years to build.

Bankruptcy is meant as a tool to help individuals and businesses regroup—and if possible—rebuild. It allows you to seek help and to take a positive step toward reducing your stress and increasing your hope.

At Farmer & Morris Law, PLLC, we understand what a difficult decision bankruptcy is for our clients. That is why we treat all our clients with respect and compassion throughout the bankruptcy processes.

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Contact Farmer & Morris Law, PLLC, for Bankruptcy Help

You do not have to go through the bankruptcy process alone. A lawyer from our team can carefully explain the process in a way that is easy to understand. We always welcome questions and concerns.

Get started toward a brighter economic future by reaching out to our firm today. We offer a free personal bankruptcy evaluation, leaving you nothing to lose by discussing your situation with us today. The sooner we review your finances, the sooner we can get to work for you.

For some individuals and businesses, declaring bankruptcy is their best option. When you hire Farmer & Morris Law, PLLC, we work hard to ensure you file under the Chapter most applicable to your situation.

Taking the first step toward learning more about your options for bankruptcy can change your life. Not taking action can keep you stuck and in potential harm for losing everything.