What is Chapter 7 Bankruptcy?
Chapter 7 bankruptcy, often referred to as a “liquidation bankruptcy,” involves gathering and selling non-exempt assets. The proceeds from these assets are distributed to unsecured creditors. Unlike Chapter 13 bankruptcy, which relies on your income to repay creditors, Chapter 7 uses the value of your non-exempt property to settle debts.
Who Qualifies for Chapter 7 Bankruptcy?
Not everyone is eligible to file for Chapter 7 bankruptcy. Your income and expenses will be evaluated to determine if your earnings fall below the median income level for your state (Kansas or Missouri, for example). Even if your income exceeds the median, you may still qualify after taking into account allowable deductions.
For more details on eligibility, check out our Bankruptcy FAQ. The experienced attorneys at Bloom Legal Advisors will review your financial situation, help you determine which type of bankruptcy is best for you, and advise whether your property is exempt.
Located in the Kansas City area, our bankruptcy attorneys are here to guide you through the decision-making process. Contact us today to schedule a free bankruptcy consultation by calling or emailing our office. Let us help you take the first step toward financial relief!
What Debts are NOT Discharged in Chapter 7 Bankruptcy?
Although Chapter 7 provides relief from many debts, certain obligations are typically non-dischargeable, including:
- Child support, alimony, and other domestic court orders
- Student loans (except in rare cases)
- Debts obtained through fraud, false representation, or intentional misrepresentation
- Luxury purchases exceeding $800 made within 90 days of filing
- Cash advances over $1,100 taken within 70 days of filing
- Personal injury claims resulting from intoxicated driving
- Criminal fines and restitution
- Debts from willful or malicious injury to another person or their property
- Certain tax debts and obligations to government entities
- Traffic and parking tickets
- Debts related to divorce or separation agreements, excluding child support or alimony
- Debts incurred to pay off non-dischargeable debts
