Everything You Need to Know About a Chapter 7 Bankruptcy

Reaffirming Debts

Chapter 7 Bankruptcy | You can also be approached about “reaffirmation” of debts. This is an agreement between you and the creditor that you’ll pay off your debt and keep the property, such as a car.

Time Limits Apply to Reaffirm

Bankruptcy reforms changed the rules for reaffirming debts, too. Now you have to declare your dedication to a loan within 45 days after the 341 meeting. You can’t just continue to make loan payments as they come due.

Purchase Option

There is also a purchase option you can use within 45 days of the 341 meeting. For example, you could buy your car by paying the loan balance within that 45 days. This option isn’t used much, because most people who file for bankruptcy don’t have that kind of money.

Steps to Reaffirm a Debt

If you decide to reaffirm a debt, you must file an agreement with the court. The agreement has to disclose:

  • Your income and expenses so the court can see that you have enough money to pay the debt
  • That you were advised of the amount of the debt you are reaffirming
  • How the debt was calculated and;
  • Your understanding that the debt will not be discharged

Unless you are represented by an attorney, the court must approve the agreement. If the court disapproves, there’s a hearing on the issue.

If an attorney represents you, he or she must certify in writing that you were advised of the legal impact of the agreement, you were fully informed, the agreement is voluntary, and reaffirmation won’t create an undue hardship on you or your family.

Discharge and Freedom from Debt

Your objective in bankruptcy is discharge, or the court’s order to end your liability for your debts, and your creditors’ ability to seek further payment. If creditors haven’t persisted in trying to get money from you and the trustee within 60 days of the 341 meeting, your debts that existed before the filing date are discharged or canceled.

There are exceptions to discharge, and your attorney can help you determine which debts you may still have to pay. Here is how common debt types may be treated in a Chapter 7 case:

 

What debts are discharged
in Chapter 7?
Dischargeable Possibly Dischargeable Not Dischargeable
  • Personal loans
  • Credit cards
  • Repossession deficiencies
  • Auto accident claims
  • Judgments
  • Business debts
  • Leases
  • Guaranties
  • Negligence claims
  • Property settlements or division of debts in divorce
  • Willful and malicious injuries to others
  • Embezzlement
  • Debts incurred by fraud or dishonesty
  • Debts arising from breach of fiduciary dutyFor debts not to be discharged, creditors must ask the court to decide what they want done with them. If a creditor doesn’t ask for a debt to be paid back, they will be canceled.
  • Recent taxes
  • Trust fund taxes
  • Child or family support
  • Criminal fine or restitution
  • Auto accident claims involving intoxication
  • Debts not scheduled
  • Penalties payable to the government other than tax penalties
  • Student loans
  • Debts listed in prior bankruptcy where debtor was denied a discharge

 

Denial and Revocation of Discharge

Creditors or the trustee can also object to discharge, or seek revocation of discharge, but it’s uncommon. Grounds to deny or revoke discharge can include fraud, such as your failure to disclose property, or giving false information during your case.

Take your time when deciding whether to file – the law says you can’t file again for two years. If you make the right decisions, it’s a quick, efficient way to get a fresh financial start. – Lawyers.com

Specializing in bankruptcy and foreclosure law for over 20 years. Call attorney David Pinkston for a free consultation today: 904.306.5791. #FloridaBankruptcyAttorney #FloridaBankruptcy

If you are thinking about #bankruptcy or #foreclosure in the Jacksonville, Florida area, you should call attorney David Pinkston. David is very experienced with all aspects of bankruptcy law yet very personable and easy to talk to. Call Us Today! 904.306.5791