Chapter 7 Bankruptcy
Kryshak Law Office, LLC
6127 Green Bay Rd.
Kenosha, WI 53142
Debt Elimination Bankruptcy
What is Chapter 7 bankruptcy?
Chapter 7 bankruptcy is a legal process in which most, or all, unsecured debts are
discharged, or eliminated. A bankruptcy trustee can liquidate (sell and convert to cash)
any non-exempt assets and use the proceeds to pay toward the debt. The term
“liquidation” is somewhat misleading since the vast majority of people who file
Chapter 7 bankruptcy do not have any non-exempt assets and can thus keep all of their
property and personal belongings.
Do I qualify to file Chapter 7 bankruptcy?
Eligibility to file Chapter 7 bankruptcy is determined under the Chapter 7 means test.
The means test is a calculation based primarily on your income and expenses. The first
part of the means test compares your income to the median income of a household of
the same size as yours. The second part of the means test looks to see if you have any
disposable income after subtracting allowable expenses from your income.
What happens to my mortgage and car loans?
As long as your mortgage and car payments are current, you should have no problem
reaffirming the debt. Reaffirmation means that you continue making the monthly
payments and you can keep the house and cars.
What debts can I discharge in a Chapter 7 bankruptcy?
Most unsecured debts can be discharged through a Chapter 7 bankruptcy. Some
examples of common unsecured debts that can be discharged include: credit cards,
medical bills, utility bills, payday/check loans, personal loans, and deficiencies from
repossessions. It is also possible to get rid of secured debt by filing Chapter 7
bankruptcy. If you no longer wish to make your mortgage or car payments, or if you
feel you can no longer afford these payments, you can choose to surrender your house
or car and get rid of these debts as well.
Even though most debt can be discharged through a Chapter 7 bankruptcy, there are
certain types of debt that cannot be discharged. Some common examples of non-
dischargeable debts include: recent tax debt, child or spousal support, most student
loans, and debt from car accidents where drugs or alcohol was involved.
What if I am being sued or have a judgment against me?
Filing Chapter 7 bankruptcy can stop a lawsuit against you and eliminate most
judgments that you may have already received. If you are currently facing a lawsuit,
you should call to set up a consultation as soon as possible to avoid any problems and
complications that may arise from the lawsuit. If you are currently being sued and own
real estate, you should act quickly to avoid getting a judgment against you and prevent
your creditors from placing a lien on your property. You should also act quickly to
avoid wage garnishment if you are being sued or face a judgment.
What if my wages are being garnished?
All garnishments must stop once you file bankruptcy. Thus, filing bankruptcy is one of
the fastest ways to stop your wage garnishment. Furthermore, once you file Chapter 7
bankruptcy, you may be able to get back some of the wages that were garnished before
the case was filed.
What if I am being harassed by creditors?
Generally, creditors are free to contact you until your bankruptcy case is filed. Thus,
the best way to stop creditor harassment is to have your case filed quickly. In
addition, there may be some alternatives to minimize creditor harassment at home, or if
you are receiving calls at work. These options can be discussed in greater detail at the
How will filing Chapter 7 bankruptcy impact my credit?
One of the major concerns with filing bankruptcy is the impact it will have on one’s
credit rating. It is true that filing bankruptcy has an adverse impact on your credit
rating. However, once your case is filed, it is possible to rebuild your credit rating
much faster than many people would expect. Reaffirming on a mortgage or car loan is
one of the best ways to rebuild credit. Even if you do not have any secured debt to
reaffirm, there are other ways to improve your credit score. Many people are able to
get financing very soon after filing bankruptcy. After as little as 1 - 2 years, many
people are able to obtain decent financing rates on a car. In a couple years after that,
people should be able to obtain financing for a home.
In all reality, if you currently have a large amount of debt or if you are late or have
missed some payments to creditors, it is likely that you are just doing further damage
to your credit score. Although filing bankruptcy is a personal decision, in many cases
it is beneficial to get a fresh start by filing bankruptcy and starting to rebuild your
What are the fees to file Chapter 7 bankruptcy?
The fees for filing Chapter 7 bankruptcy may vary depending on the complexity of
your case. Bankruptcy law is very technical and thus the initial consultation is very
important to provide accurate advice and assess the complexity of your specific case.
Kryshak Law Office offers low fixed rates and flexible payment plans.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code. This web
site is designed for general information only. The information contained on this site should not be viewed as
formal legal advice nor the formation of a lawyer/client relationship.
Copyright © 2009 Kryshak Law Office, LLC. All rights reserved.