Tag Archives: Chapter 7 Bankruptcy

Preparing to File for Chapter 7

Chapter 7 bankruptcy is designed to give people who are buried in debt a chance to dig themselves out of the hole and get a fresh start. There are some steps you can take prior to filing your petition that may help you avoid pitfalls and get the most benefit from the bankruptcy process. Be sure all of your tax returns are filed. Your previous two years of tax returns must be filed and copies submitted no later than the date scheduled for the meeting of creditors. The trustee may ask for more information about your taxes and your tax returns. Get copies of your credit reports. If you fail to include a debt in your bankruptcy petition, it will not be discharged even if it is a dischargeable debt. Your credit reports may include debts you forgot about. Gather together relevant information for filling out Schedules. Along with the…
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Chapter 7 Abandoned Property

What Happens When the Trustee Abandons Property in a Chapter 7 Bankruptcy? When you file your petition for Chapter 7 bankruptcy, except for property that is considered exempt, trustees can sell your assets to raise funds to pay your creditors. On the other hand, trustees may opt to abandon non-exempt property. The usual reason for abandonment is that selling the property would not generate enough funds to make selling it worth the effort. For example, if you have $3,000 exempt equity in your car that has a market value of $10,000 but you owe the lender $12,000. There will not even be enough money to pay the lender after a sale. The trustee will then abandon the car. What happens next depends on your unique circumstances. What Happens to Abandoned Property? If you own the abandoned property free and clear, you get to keep it. This is generally the case…
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Saving Your Car in Chapter 7 Bankruptcy by Reaffirming the Debt

You may need to file for Chapter 7 bankruptcy, but are concerned you will lose your car. If the equity you have in the car is not exempt, you could lose it to the bankruptcy trustee. In some cases, even if the equity is not exempt, the bankruptcy trustee may abandon the property. If the equity is exempt, or the bankruptcy court abandons it, you will still need to work out an arrangement with your lender in order to keep your car at the end of the bankruptcy process. In order to do this, you must reaffirm the debt. There are pros and cons to this process. What does reaffirming mean? When you reaffirm a secured debt like your car loan, you enter into a new written contract with the lender where you agree that you will still owe the debt at the conclusion of the bankruptcy. You may be…
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