Chapter 7 bankruptcy, often referred to as “liquidation” or “straight” bankruptcy, is a legal process that provides individuals or businesses with the opportunity to eliminate unmanageable debts and start afresh. It’s a powerful tool for debt relief and can be a lifeline for those sinking under the weight of financial obligations. In essence, Chapter 7 bankruptcy involves the sale of a debtor’s non-exempt assets by a trustee. The proceeds from the sale are then used to pay off creditors. After the successful completion of the bankruptcy process, the debtor is typically discharged from most of their debts, offering them a fresh slate. If you believe Chapter 7 bankruptcy might be right for you, please don’t hesitate to speak with a competent Montgomery County Chapter 7 bankruptcy lawyer from Mudrick & Zucker today.
Bankruptcy can be a complex and daunting process, but you don’t have to go through it alone. Mudrick & Zucker is here to guide you every step of the way. With a seasoned Montgomery County bankruptcy lawyer from our firm, you’ll find compassionate and knowledgeable support in your journey toward financial freedom.
Anyone with unmanageable debt can technically file for Chapter 7 bankruptcy. However, you must first pass the “means test” to qualify. This test compares your income to the median income for a household of your size in Pennsylvania. If your income is below the median, you may be eligible. However, in some cases, even if your income exceeds the median, you may still qualify if you have high expenses such as mortgage payments, car loans, or medical bills.
If you’re an individual facing insurmountable debt, Chapter 7 bankruptcy can offer you a fresh start by wiping out various types of debt, including credit card debt, medical bills, personal loans, and more. However, it’s essential to note that some debts, such as student loans, most tax debts, and child support, are typically not discharged under Chapter 7.
First, you’ll file a petition at the bankruptcy court. This is followed by the appointment of a trustee who will sell your non-exempt assets. Once the process is completed, most of your debts will be discharged, and you can start rebuilding your financial life.
For business owners, Chapter 7 bankruptcy can provide a method of closing down a failing business and discharging its debts. The process is similar to that for individuals, and once a bankruptcy petition is filed, a trustee is appointed to liquidate the business assets and pay off creditors.
It’s crucial to remember, though, that Chapter 7 results in the dissolution of the business. If you wish to continue operating your business, you might want to consider Chapter 11 or Chapter 13 bankruptcy instead.
A brief outline of the Chapter 7 bankruptcy process is as follows:
Filing for bankruptcy is not a sign of defeat. It’s an opportunity for a fresh start and the first step towards rebuilding a secure financial future. Reach out to a dedicated Chapter 7 bankruptcy lawyer from Mudrick & Zucker today for a free consultation and let’s start your journey towards financial relief.