1. What is Chapter 7 and how does it work?
Bankruptcy Katy Texas Chapter 7 is that part of the federal bankruptcy law that permits a person to be released from personal liability for his or her unsecured debts except those listed below in paragraph 3. The debtor is allowed to keep all exempt property. The debtor must attend a brief meeting about one month after the filing of the case. The Chapter 7 Trustee who is appointed to the case will review the paperwork at this meeting. An attorney from our office will be with you at this meeting. You can refer your creditors to our law office after you set up a payment plan for your attorney fee. Your creditors must stop all collection efforts after the date your case is filed with certain exceptions, such as past due child support payment and criminal fines and penalties.
2. What is a Chapter 7 discharge?
It is a court order releasing a debtor from all of his or her dischargeable debts and ordering the creditors not to attempt to collect them from the debtor. A debt that is discharged is one that the debtor is released from and does not have to pay. Some debts, however, are not released by a Chapter 7 discharge, and some persons are not eligible for a Chapter 7 discharge.
3. What debts are not release by a Chapter 7?
All debts of any kind or amount, including debts incurred in other states, are released by a Chapter 7 discharge, except those listed below. The following debts cannot be discharged under Chapter 7
1. debts for certain taxes, including taxes that became due within the last
2. if the creditor files a complaint and if the court so rules, for obtaining money, property, services, or credit by means of false pretenses, fraud, or a false financial statement (included here are certain debts for luxury goods or services and for certain cash advances made within 60 days before the case is filed);
3. debts not listed on the debtor’s Chapter 7 papers, unless the creditor knew of the case in the time to file a claim;
4. if the creditor files a complaint and if the court so rules, for fraud,
embezzlement, or larceny;
5. debts for alimony, maintenance, or support, with certain very limited
exceptions (or those in the nature of alimony, maintenance or support – no matter what they are called);
6. if the creditor files a complaint and if the court so rules, for international or malicious injury to the person or property of another;
7. debts for certain fines or penalties;
8. debts for student loans, guaranteed by the U.S. government, that became due within the last seven years, unless not discharging the debt would impose an undue hardship on the debtor and his or her dependents,
9. debts arising from a judgment or court decree entered against the debtor for damages resulting from the operation of a motor vehicle while legally intoxicated;
10. debts that were or could have been listed in a previous bankruptcy case of the debtor in which the debtor did not receive a discharge; or
11. debts for malicious or reckless failure by a banker or former banker to fulfill certain commitments by him to maintain the capital of the institution of which he worked (insured depository).
4. Can a person be denied a Chapter 7 discharg?
Everyone is eligible for a Chapter 7 discharge except the following persons:
1. those who have been granted a discharge in a Chapter 7 case filed within the last eight years;
2. those who have been granted a discharge in a Chapter 13 case filed within the last six years, unless 70 percent or more of the unsecured claims were paid off in the Chapter 13 case;
3. those who file a waiver of discharge in their Chapter 7 case that is approved by the court;
4. those who conceal, transfer, or destroy their property with the intent to defraud their creditors or the Trustee in the Chapter 7 case;
5. those who conceal, destroy, or falsify records of the financial condition or business transactions;
6. those who make false statements or claims in their Chapter 7 case, or who withhold recorded information from the Trustee in the case;
7. those who fail to satisfactorily explain any loss or deficiency of their assets; or
8. those who refuse to answer questions or obey orders of the bankruptcy court, either in their case or in the case of a relative, business associate, or corporation.
5. Who may file under Chapter 7?
Any person who resides in, who does business in, or who has property in the United States may file under Chapter 7, except a person who has been involved in another bankruptcy case that was dismissed within the last 180 days on certain grounds. It may not be wise, however, for a debtor to file under Chapter 7 if he is not eligible for a Chapter 7 discharge. Also, it may not be wise for a debtor with sufficient current income with which to repay a substantial portion of his debts within a reasonable period to file under Chapter 7, because the court may dismiss the case as constituting an abuse of Chapter 7.
6. Where is a Chapter 7 case filed?
In the office of the clerk of the bankruptcy court of the district where you have lived or maintained your principle place of business for the greatest portion of the last 180 days. The bankruptcy court is a federal court and is a unit of the United States district court.
7. Under what conditions should a husband and wife both file under Chapter 7?
Both husband and wife should file if some of the debts to be discharged are owed by both spouses. If both spouses are liable for some of the debts and if only one spouse files under Chapter 7, the creditors often try to coerce the non-filing spouse into paying the debts, even if he or she has no income or assets. In community property states, however, it is customary for both spouses to file if most of the debts are community debts. The community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas and Washington.
8. How does filing under Chapter 7 affect lawsuits and attachments that have already been filed against the debtor?
The filing of a Chapter 7 case automatically stays or stops most lawsuits and attachments that have been filed against the debtor. A few days after a chapter 7 case is filed, the court will mail a notice to all creditors ordering them to refrain from any further action against the debtor. If the debtor cannot wait this long, it is permissible for him or his attorney to notify one or more of the creditors of the filing of the case. Any creditor who intentionally violates this court may be liable to the debtor in damages. The most common actions not affected by the filing of a Chapter 7 case are criminal proceedings and actions for the collection of debts for alimony, maintenance, or support from exempt property or from property or funds acquired earned by the debtor after the case was filed.
9. May a person file under Chapter 7 if his debts are being administered by a financial counselor?
Yes. A financial counselor, or credit counseling service, has no legal right to prevent anyone from filing under Chapter 7.
You need to learn about all of your options including information about credit, debt, bill consolidation services and federal bankruptcy law. Please call us that we can discuss your case.You can also visit our web site: www.busby-lee.com. Our attorney fees are reasonable, competitive, and court- approved. It is important that you call us soon.
We provide bankruptcy services in the greater Houston metro area including the cities of Katy, Sugarland, Pearland, Friendswood, Clear Lake and Galveston. We also handle cases from The Woodlands, Spring and Tomball and cases in Baytown and Channelview.
We handle bankruptcy cases in all of these counties: Brazoria, Chambers, Galveston, Matagorda, Austin, Brazos, Colorado, Fayette, Fort Bend, Grimes, Harris, Madison, Montgomery, San Jacinto, Walker, Waller, Wharton