Chapter 7 bankruptcy in Missouri is a type of bankruptcy that offers individuals and families a "fresh start". You must list all of your assets, debts, income, and expenses when filing Chapter 7 bankruptcy. Chapter 7 bankruptcy is designed to discharge unsecured general non-priority debts such as credit cards, medical bills, signature loans, payday loans and many other debts, whether or not they are listed on your credit report. A Chapter 7 Discharge will mean that you will no longer be personally responsible for those debts. In short, that means you will not have to pay those debts. Chapter 7 will also prevent those creditors from garnishing your wages or from collecting that debt in any way after the debt is discharged. If you fail to list any debt then you will not be protected from that creditor and will not be discharged from that debt. At a free bankruptcy consultation with the Roach Bankruptcy Center we will discuss all of the ways that we can protect you from your creditors and get you the fresh start that you need.
What is an Automatic Stay
An automatic stay is something that you will receive immediately upon filing the Chapter 7 Bankruptcy. What this automatic stay does is prevent your creditors from collecting the debt in any way. It will stop any foreclosures, repossessions, lawsuits and garnishments. The automatic stay will prevent your creditors from calling and harassing you at home or at work. The stay is what it says it is in that it is automatic. What that means is that your creditors do not have a choice. They must stop any and all collection efforts on your debts. If the creditors believe that you should not be entitled to an automatic stay or discharge then they must file the appropriate paperwork with the Court. The creditors may not continue to collect on any debt unless the Court authorizes them to after you have a hearing. Any willful violations of the automatic stay could result in sanctions for a creditor. If you are needing a quick automatic stay then you will want to schedule a free consultation with the Roach Bankruptcy Center so we can discuss how quickly we can file your Chapter 7 bankruptcy.
Some Debt is Non-Dischargeable
Chapter 7 bankruptcy does not generally discharge certain debts such as child support, student loans, or most taxes. Child Support or Alimony debts are never dischargeable even though you will need to list them in the bankruptcy. Student Loans can only be dischargeable if you have an undue hardship which prevents you from paying any of the student loans. Taxes are generally not dischargeable in a Chapter 7. However, in some case taxes can become dischargeable depending on the age and type of the tax owed. There are other debts that could be considered to be non-dischargeable under the Bankruptcy Code based on the nature and circumstances of the debt. Some of those debts are court ordered fines and criminal restitution, debts from a car accident where drugs or alcohol are involved, debts that are obtained by some level of fraud, misrepresentation, or deception, and debts that are from willful or malicious injury to another person. At a free bankruptcy consultation we will go over all of your debts and determine what if any debts you would have that would be non-dischargeable.
Secured Debts such as mortgages and vehicle loans
You must list all of your secured debts such as mortgage loans or auto loans in your Bankruptcy. Secured debts are debts in which you have collateral for the loan such as a house or vehicle. You will need to list those debts on a Statement of Intention. You basically have three choices with your secured debts. (1) You can surrender your collateral, such as a house or vehicle, in lieu of paying the secured debt. In this case, the debt will discharge with the unsecured general non-priority debts. (2) You may redeem the collateral. What that means is that you can pay the value of the collateral and redeem the title to the house or vehicle. Or (3) You could choose to do a reaffirmation. A reaffirmation is an agreement between you and the secured creditor (mortgage company or car loan company) that basically reinstates that loan. What that means is that you will be personally liable for that mortgage or car loan as if you have not filed for bankruptcy on that debt. Generally, you must be current on your mortgage or vehicle payments in order to do the reaffirmation and keep a house or vehicle in a Chapter 7 bankruptcy. At a free bankruptcy consultation we will go over your secured debts and determine which options work best for you.
Chapter 7 is a liquidation form of Bankruptcy
Chapter 7 bankruptcy is a liquidation from of bankruptcy. What that means is that an individual called a Trustee will be looking at your assets to see if there are any assets that he or she can take and sell to pay off any or all of your debts. You must list of your assets when you file a Chapter 7. Most Chapter 7 Bankruptcies do not have assets that are liquidated. That is because of a series of State and Federal laws called exemptions. Specific exemptions allow you to protect some equity in your home, some equity in vehicles, retirements, household goods and furnishings, jewelry, clothing, as well as many other various assets. There are also general exemptions that will allow you to pick what property you protect. However, the general exemptions are limited. Assets that may not be fully protected by exemptions are significant amounts of money in your bank account or "cash on hand" on the date of filing. Additionally, tax refunds may be an asset that is not fully exempted in Chapter 7. If you fail to list any of your assets or property on your bankruptcy then it is likely you will be prohibited from using any exemptions on that property. Any assets or property that is not exempted may be taken by the trustee and sold to pay some or all of your unsecured creditors. At the free bankruptcy consultation we will go over all of your assets, determine what exemptions you are entitled to, and find the best way to protect your property.
What property or assets do I need to list in Chapter 7
The short answer is all of your property. By law you must list all of the assets that you own on the date you file for bankruptcy. All of this property is put into a bankruptcy estate. This property will include any real estate such as the residence that you live in. It will also include any other buildings, vacant lots, or timeshares that you own all or part of. You must list any vehicles, boats, or motorcycles that you own as well. If your name is on a home or vehicle then you do own that asset and you will need to list it even if it is not in your possession. You will also need to list all of your household goods and furnishings which will include things such as furniture, appliances, linens, dishes, televisions, stereos, computers, cell phones, cameras, antiques, collectables, books, pictures, decorations, sports equipment, camping equipment, fishing equipment, tools, firearms, clothing, jewelry, and any other household item. There is no item that is too small or too low in value that you are exempt from listing it. You will also need to list any financial assets that you own such as money in a bank account, stocks, bonds, retirements, Pensions, 401(k)'s, interests in any businesses, corporations, partnerships, security deposits, annuities, education savings accounts, trusts, equitable or future interests, patents, copyrights, trademarks, trade secrets, licenses, franchises, tax refunds, child support or alimony owed to you, other money or accounts receivable owed to you, interests in insurance or insurance policies, inheritances, or any claims you may have against any party. If you have business assets or farm equipment and assets then you will also need to list those as well. If there is an asset that you are not sure about then ask the Roach Bankruptcy Center at your free consultation.
After Acquired Property
Normally, when the Bankruptcy Court or Bankruptcy Trustee looks at your assets, they look at assets that you own on the date of filing. This is called the bankruptcy estate. However, there are two exceptions to this rule. The first exception is if you receive an inheritance within 180 days from the filing of the bankruptcy. An inheritance could be any money, life insurance, real estate, vehicles, or any other property. This rule applies if the person leaving you the inheritance passes away during the 180 day period after you filed the bankruptcy. It is not possible to avoid the rule by actually receiving the inheritance, after the 180 day period has concluded. The second exception is if you are awarded property from a divorce decree within the 180 day period following the filing of a bankruptcy. If either exception applies then that property will be property of the bankruptcy estate. This means that property could be taken by the Trustee subject to any exemptions that may apply. If you are expecting that you will be inheriting property soon or looking to get a divorce then you will want to discuss that situation at your free bankruptcy consultation with the Roach Bankruptcy Center.
Do I qualify for Chapter 7
Chapter 7 bankruptcy also has two income qualifying guidelines. The first is a guideline known as the "Means Test". This income guideline will take a look at all of your gross income received by any member of your household during the six-month period prior to the month you file for bankruptcy. This includes income from all sources regardless of whether that income is taxable or not but excludes all Social Security Income. That income will first be compared to the Median Family Income for a household of your size in the state in which you reside. If your income is below that Median Family Income then you pass that income guideline. If your income is above that Median Family Income then we must fill out the remainder of the "Means Test" form by plugging in some IRS standard deductions and some of your actual expenses to determine if you pass that income guideline.
The second guideline also deals with your income and expenses. It basically asks the question of whether you have any reasonable likelihood in the foreseeable future that you can afford to pay any or all of the debts you are attempting to discharge. What that means is that we will add up all of your income and all of your monthly expenses. We will then compare them to see if you have any income left over on your budget which shows you can afford to pay your creditors. If you do not have any extra income then you pass that guideline. At a free bankruptcy consultation we can discuss any budget concerns you may have in qualifying for Chapter 7 bankruptcy.
How will Chapter 7 affect my credit?
Chapter 7 Bankruptcy is designed to discharge debt so that you do not owe it anymore. It is not designed to be a credit repair tool. What the Chapter 7 Bankruptcy does to a credit score is different for each individual. Although, in many instances your credit score will improve when you no longer owe the debts that were causing your credit score to be so low. Chapter 7 bankruptcy will stay on your credit reports for up to 10 years. During that time you may still qualify for home loans, vehicle loans, and credit cards. There are ways that you can improve your credit after the conclusion of the Chapter 7. If one of your goals is to be able to get into a new home or car then you will want to discuss what options you have at the free consultation with the Roach Bankruptcy Center.
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