Chapter 7 Bankruptcy

Chapter 7 Bankruptcy

The Most Common Form of Bankruptcy

Springfield Chapter 7 Bankruptcy Lawyers

At Debt Doctors of Missouri, we have successfully guided thousands of clients throughout the southwest region of the state through Chapter 7 bankruptcy filings. Chapter 7 is the most common form of bankruptcy and is the quickest and least expensive type of bankruptcy to discharge most debts and retain most assets, such as your car or your home.

How a Chapter 7 Bankruptcy Works

A Chapter 7 bankruptcy is commonly referred to as a “liquidation bankruptcy” because, if you have assets worth a lot more than your debt, these could be liquidated and sold by the Court to pay your creditors. Our team at Debt Doctors of Missouri will work diligently and aggressively to help you keep your property and use the provisions of Chapter 7 to help erase or reduce your debt. This type of bankruptcy allows you to get rid of most, if not all, of your unsecured debt, such as credit card debt, medical debt, signature and payday loans, collection accounts, repossession balances, lawsuit judgements, utility bills, and so on, while allowing you to keep your property.

Bankruptcy Stops Collection

You will get relief from creditor and collection agency harassment the day you file for bankruptcy. The Court will issue an “automatic stay” that bars collection calls, lawsuits, garnishments, repossessions, or foreclosures immediately. 

Keeping Your Property in a Chapter 7 Bankruptcy

Exemptions are the laws that allow you to protect property from creditors so that, even after a bankruptcy, you will have the basics you need to return to a normal life. However, if you choose the wrong exemption, you can lose property. That is why you need an experienced professional to ensure the right law is claimed for you. You don’t have to lose your car or home in a Chapter 7 bankruptcy. You can “reaffirm” or keep secured loans, such as mortgages and car loans. These can be held at the same monthly payment and interest rate, allowing you to retain possession of your home or automobile. Sometimes we can even negotiate with a creditor to reduce the debt and/or interest rate on these obligations. 

Tax Consequences

The discharge of debt through a Chapter 7 is not taxable. However, if you operate a business, you may lose the ability to carry over prior year tax losses after a Chapter 7 bankruptcy. We recommend that you consult a tax professional for further details regarding your specific situation.

Empowering You to Heal Your Debt

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