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Chapter 7

Chapter 7 bankruptcy is the most common type of bankruptcy in the U.S. Also known as a straight bankruptcy or liquidation, federal law provides for Chapter 7 bankruptcy to help debtors get a financial fresh start. It’s typically intended for those with few or no assets, and it can eliminate many if not most unsecured debts, such as credit cards, personal loans, medical bills, repossessed vehicle deficiencies and judgments due to car accidents. Chapter 7 will not eliminate all debt, however. Student loans, child support, spousal support, alimony or maintenance, and most tax debts cannot be discharged.

How Does It Work?

If you are eligible for a Chapter 7 bankruptcy, you’ll begin by gathering and completing a variety of documentation to support your petition. This includes:

  • Proof of income for the most recent 6 months,
  • Tax returns,
  • Bank statements,
  • A list of your creditors,
  • and a list of your monthly bills


You will also need to complete a certified credit counseling course and file the certificate of completion with your other documents.

Along with the statement of financial affairs, schedules and the official bankruptcy forms, you will also need to gather and provide:

  • A list of your creditors, the amount you owe, and the nature of the claims
  • Information about your income, including its source, amount and frequency
  • A list of all your property
  • A detailed list of your current monthly expenses, including the cost of utilities, shelter, food, taxes, clothing and other necessary items


Individual and Joint Petitions

If you are married, you have the option of filing individually or jointly. Both individuals and married couples need to file all the necessary documents. Whether it’s best for you to file jointly or individually can vary on your specific situation, your state’s exemption laws, your joint debts and the amount of property you own.

When just one spouse has excessive debt, he or she has the option to file bankruptcy individually. You’ll be able to have your own debts discharged without your spouse’s credit being negatively affected. Filing jointly can lower your court and attorney costs, and you and your spouse will only need to complete a single petition. All your eligible joint and individual debts can be discharged at once.

Your attorney at First America Law will advise you whether filing individually or jointly is in your best interests


Bankruptcy is designed to provide people with a fresh start. A fresh start wouldn’t be possible if debtors were to lose all of their property. Therefore, the court allows for exemptions.

Your attorney at First America Law will review your exemptions with you to let you know what property you can keep if you file Chapter 7.

Meeting of the Creditors

After your case is filed, a bankruptcy trustee will be assigned to your case.  You will be required to attend a meeting of the creditors and your bankruptcy trustee will ask you questions under oath about your finances, your property, and other factors affecting your bankruptcy. Your First America Law attorney will represent you at this meeting of creditors.

Life after Chapter 7 Bankruptcy

After your Chapter 7 bankruptcy is finished, you will receive a bankruptcy discharge. Bankruptcy can cause your credit score to drop as much as 200 points. You can start rebuilding your credit score by using credit responsibly. Responsible credit card use and paying your balances off in their entirety every month are good beginnings.  Your credit score will gradually begin to improve, and with time, you’ll be back in good financial health. Bankruptcy can sometimes improve your credit score approximately 12 months after filing and removes delinquent accounts that are dragging down the credit score.

Calling First America Law at 1-800-695-7674 can be one of your best first steps towards a future free of debt. We can help you decide if Chapter 7 bankruptcy is right for you. Our team offers free evaluations, and you can talk to an experienced bankruptcy representative about your situation, needs and goals. Call us at 1-800-695-7674 today.