The key factor to keep in mind when filing a Chapter 7 bankruptcy is that it works for unsecured debt. Unsecured debt under Chapter 7 bankruptcy is defined as a debt that isn’t backed by collateral. If you entered a credit contract that didn’t require you to allow the creditor to take the property purchased if you didn’t comply with the contract terms.

Some of the debts you can discharge by filing for Chapter 7 include the following:

• Business debts
• Past-due utility bills
• Medical bills
• Collection agency accounts
• Personal loans from employers, friends and family
• Credit card charges (late and overdue fees)
• Some auto accident claims

• Past-due rent (or money owed under lease agreements)
• Civil court adjustments
• Most attorneys’ fees
• Welfare, social security, veterans’ assistance and other government program overpayments.

This is just a simplified list of the debts you can discharge using Chapter 7 bankruptcy. You can consult with your Chapter 7 bankruptcy lawyer for a more comprehensive list and to confirm whether your types of debt are covered.

Another crucial aspect to consider with Chapter 7 bankruptcy is the types of debt that you cannot discharge. When you get the discharge order after successfully filing for Chapter 7 bankruptcy, it will not list the debt you wiped out. However, it will list the debts you will remain responsible for paying, which may include the following:

• Secured Debts:
  These include mortgages and car loans if you decide to keep the property. If you don’t continue to pay as agreed, the lender will take back the property or the collateralized property using their lien rights.
• Recent Income Taxes And Other Priority Debt:
  You must repay priority debts even if you file for Chapter 7 bankruptcy. These include child and spousal support obligations and recent tax bills.
• Debts Incurred By Criminal Acts Or Fraud:
  If a debt was incurred as a result of fraud or other wrongful action, such as killing or injuring someone or driving under the influence, the court can declare such an obligation non-dischargeable. However, the creditor must first file a bankruptcy lawsuit or adversary proceeding to show that the filer committed fraud.
• Student Loans:
  Bankruptcy courts in Watertown, NY, don’t automatically discharge student loans. You will remain responsible for student loans under Chapter 7 bankruptcy. However, you can ask your bankruptcy lawyer to file an adversary proceeding showcasing that repaying the debt would cause undue hardship.

Even after filing a Chapter 7 bankruptcy, you still need to keep certain essentials to help you remain productive in society. Chapter 7 allows some exemptions to ensure this. However, exempt asset laws are both at the federal and state levels. But generally, some of the assets that might be exempt in a Chapter 7 filing include the following:

• Your home (subject to a certain percentage of equity)
• Your car (up to a particular value)
• Clothing and qualifying jewelry
• Certain household items
• Work-related items
• Child and spousal support
• Qualifying insurance benefits
• Qualifying personal injury awards
• Benefits such as unemployment and veteran’s benefits
• Retirement accounts

Typically, judges rely on the law when determining the exempt assets but also practice discretion when categorizing the different assets and items that you can keep.

Hobaica Law Office : Helping Our Clients In Watertown, NY, Restructure Their Financial Journey

Let’s help you lay down the debt burden and start working towards a new financial future.

Are you thinking of filing for bankruptcy and starting over fresh? Filing for Chapter 7 bankruptcy can help you offset regular debt payments that you can’t reorganize using non-exempt assets. While typically filed by individuals, small businesses looking to close down can also use Chapter 7 bankruptcy to liquidate their assets and pay off their creditors with the help of a small business bankruptcy attorney.

Whether you’re filing Chapter 7 for yourself or your small business, you need a bankruptcy lawyer near me in Watertown, NY to help you with the process and the Hobaica Law Office is here to assist. You can contact us at (315) 627-2800 for assistance with filing for Chapter 7 bankruptcy.