Please scroll down this page to view the various answers to the frequently asked questions
concerning CH 7 Bankruptcy.
CAN I KEEP MY HOUSE?
Generally a client can keep their house when filing CH7 Bankruptcy if they are current on their
mortgage payment and they do not have to much equity in the home. The general rule is $5000 for
individual and $10000 for a joint case (joint means you and your spouse file together). Please call to
discuss how to determining the amount of equity in your home.
CAN I KEEP MY VEHICLES?
If a client is current on their vehicle payment the client will generally be able to keep the vehicle. If the
client owns the vehicle free of any debt the client will generally be able to keep the vehicle if it is not
valued much over $3000 individual or $6000 joint.
CAN I KEEP MY FURNITURE AND OTHER HOUSEHOLD ITEMS?
Generally most furniture and other household items are exempt up to $3000 if filing individually and
$6000 if filing jointly, and therefore would be retained by the client . If an item is secured by a creditor
the item can be paid for by the client by reafirming the debt or if avaliable a motion can be filed in
certain cases to wipe out that creditors secured claim.
( When reafirming a debt, the creditor will send an agreement to our office, the client would sign the
agreement, the agreement will generally say they will keep the property and continue to pay the debt
under the original agreement.)
CAN I WIPE OUT LAWSUITS AND GARNISHMENTS?
The filing of a bankruptcy prevents any lawsuits from being filed or judgments entered against you. If
you file bankruptcy and a lawsuit against you is pending, it can go no further. If a judgment has been
entered, its enforcement can go no further, at least not without first getting permission from the
bankruptcy court.
After a CH7 case is filed a motion is filed that immediately stops garnishments from continuing.
CAN I WIPE OUT TAX DEBTS?
Income tax debts over three years old can usually be wiped out with other unsecured debt if the tax
returns were filed promptly only with a ch13.
WHAT DEBTS WILL NOT BE WIPED OUT?
Generally speaking, the following debts will not be discharged: IncomeTaxes ; Spousal and Child
Support; Debts arising out of willful misconduct and or malicious misconduct by the debtor; liability for
injury or death from driving while intoxicated; nondischargeable debts from a prior bankruptcy; student
loans and criminal fines, penalties and forfeitures, checks written for goods or services.
WHO CAN FILE CH7 BANKRUPTCY?
You must reside or have a domicile, a place of business, or property in the United States or a
municipality.
You must not have been granted a Chapter 7 discharge within the last 8 years or completed a Chapter
13 plan.
You must not have had a bankruptcy filing dismissed for cause within the last 180 days.
It must not be a "substantial abuse" of Chapter 7 to grant the debtor relief. Generally speaking, if after
you pay the monthly expenses for necessities there is not enough money to pay the remaining monthly
debts, then granting a discharge would not be an abuse of Chapter 7.
It would not be fundamentally unfair to grant the debtor relief under Chapter 7.
WHAT SHOULD I NOT DO IF FILING CH7 BANKRUPTCY?
There are several areas related to this question. You should consult your attorney. In particular there are
three items worth mentioning.
Under bankruptcy law, certain luxury purchases over $1000 within 60 days of the bankruptcy filing are
presumed nondischargeable.
Under bankruptcy law, cash advances agregating $1000 within 60 days of the bankruptcy filing are
presumed nondischargeable.
Debts involving materially false financial statements are nondischargeable under certain circumstances.
Do not sell real estate for less than fair market value to an insider such as a relative or business partner.
The following language is required pursuant to Rule 7.2, Alabama Rules of Professional Conduct. No
representation is made that the quality of legal services to be performed is greater than the quality of
legal services performed by other lawyers.This web site is designed for general information only. The
information presented at this site should not be construed to be formal legal advice nor the formation of
a lawyer/client relationship.