Chapter 7 Bankruptcy

Unmanageable debts can make your life miserable. Bills go unpaid and generate additional penalties and late fees. Creditors pester you at home and embarrass you by calling you at work. You can't sleep at night and fear losing everything you have. I CAN HELP!

Chapter 7 bankruptcy is the most common form of bankruptcy. Chapter 7, known as a "straight" or "liquidation" bankruptcy, is designed to wipe clean or discharge unsecured debts such as credit card bills, medical bills, personal loans and unsecured contracts.

It is a liquidation proceeding in which the debtor's nonexempt assets, if any, are sold by the Chapter 7 trustee and the proceeds distributed to creditors according to the priorities among creditors established in the Bankruptcy Code.

What is important in bankruptcy is your exempt assets and how much in exemptions you can claim. In most cases, the debtor pays nothing to unsecured creditors because all of his or her property is exempt.

Chapter 7 is available to individuals, married couples, corporations and partnerships. Most individual debtors get a discharge within 90 to 120 days of filing the case.

If there are assets that are not exempt, the trustee takes control of those assets, sells them and pays creditors as much as the proceeds permit.

Any wages the debtor earns after the case has been filed belong to the debtor. The creditors have no claim on those earnings.

If you want to keep property like a car or home that is secured by a creditor, you must be current, or able to bring the debt current, with the secured creditor. Otherwise, these creditors are entitled to take the property that is collateral for their debt.

An automatic stay is entered when your case is filed and stops all collection actions during the bankruptcy. A Chapter 7 bankruptcy stops repossession and garnishment. It also stops a foreclosure action on your home, giving you time to bring mortgage payments current or find another place to live. A creditor can file for relief from stay, allowing the collection process to continue again. For more, see the page Relief From Stay.

Eligibility: Whether a debtor qualifies for a Chapter 7 or Chapter 13 depends on several factors, but most importantly what your income was in the six months prior to filing bankruptcy and whether your income is above the median for your household size in Iowa. If it is above the median income, then you will have to pass a means test. It is a complicated formula to determine if you are eligible for a Chapter 7. If you pass the means test, then you can file for Chapter 7 or Chapter 13.

Attorney Dallas J. Janssen understands bankruptcy laws and how to use them to the advantage of our clients. His office will work to exempt as much of your property as possible, while eliminating as many of your debts as possible.

We encourage you to call 515-421-9068 or use our online contact form to schedule a free one-hour consultation with a lawyer who emphasizes clear communication and cost-efficient solutions. We will review your situation and recommend an effective course of action.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.