Chapter 7 bankruptcy is also known as a liquidation proceeding, as opposed to reorganization (Chapter 13). The Chapter 7 process is the shortest termed bankruptcy that you can file. A Chapter 7 case typically takes about 90 days, depending on how many assets and creditors you have. When a person files for bankruptcy, there is an automatic stay (or hold) on collection efforts against the debtor, another word for the person who filed for bankruptcy. The automatic stay requires all collection activity against the debtor to stop immediately, including: garnishments, repossessions, foreclosures, phone calls, and letters. See bankruptcy case In re Moffett. For more information on Chapter 7 or Chapter 13 bankruptcy, contact a Chapter 7 attorney in Tampa
The Automatic Stay
Any actions that violate the Chapter 7 bankruptcy stay are seen by the court as ineffective. For example, if a creditor tries to secure his claim after the debtor has filed for bankruptcy, the Court will act as if the action never happened. Moreover, certain violations of the stay can result in the creditor being forced to pay your attorneys’ fees and/ or contempt charges may be brought against the bank.
The stay allows for a period of inactivity so that the trustee, sometimes called the “debtor in possession,” can collect and assemble all of the assets (the things of value the debtor owns,) sell them, and then distribute the monetary gain amongst the creditors in order of priority. However, in most Chapter 7 cases the debtor does not lose property due to exemptions. A Chapter 7 attorney in Tampa can help structure your case to prevent the loss of assets to the trustee.
Secured & Unsecured Debts
In Chapter 7 bankruptcy, the first step is to subtract from the assets any secured claims. Secured claims are not subject to discharge and thus must be paid in full. See bankruptcy law 11 US 506. For the next step, it is important to remember the difference between secured claims and unsecured claims. An easy example of a secured claim, a claim with collateral, is a car loan: you don’t pay the loan, the car can be repossessed. An example of an unsecured claim is a credit card – something without any collateral.
Priority Claims in Chapter 7
Priority unsecured debts in Chapter 7 bankruptcy receive special protection under bankruptcy law. Unsecured debts with priority get paid first, before nonpriority debts. See bankruptcy law 11 U.S.C. § 507. Examples of priority unsecured debt are child support, alimony, administrative expenses (such as taxes and fines), governmental claims, and FDIC claims. Typically, priority unsecured debts will not be discharged in bankruptcy. Conversely, most nonpriority unsecured debts are eligible for a discharge in Chapter 7 bankruptcy. A Tampa Chapter 7 attorney can help you evaluate which debts may be classified as priority in bankruptcy.
The Chapter 7 Fresh Start
The goal of the Chapter 7 Bankruptcy case is to give the debtor a fresh start. The fresh start is obtained by discharging debt, so that the borrower can move one without the debt hanging over their head. If a debt is discharged in bankruptcy the borrower will be released from all liability on the debt. The discharge is a permanent court order releasing the borrower from the responsibility of having to pay the debt. Further, the discharge prohibits a creditor from taking any collection action against the borrower. In most cases, obtaining a discharge will be the primary reason why a borrower files for Chapter 7 bankruptcy.
Chapter 7 Bankruptcy Attorney in Tampa
Bankruptcy can be a very complex area of the law for many people. For information about any specific case or circumstances contact a Chapter 7 bankruptcy attorney in Tampa for assistance. This article is general information only and not intended to be legal advice for any particular set of circumstances. It is best to have a Chapter 7 bankruptcy attorney in Tampa review your specific situation to help develop a plan to help maximize the relief that can be provided with bankruptcy.
At Florida Law Advisers, P.A. we understand that filing for bankruptcy can be a very confusing and intimidating process. That is why we work so hard to make the process as easy as possible for our clients. When you hire Florida Law Advisers, P.A., you get an experienced Tampa bankruptcy lawyer by your side throughout every phase of the bankruptcy process. We will help ensure your rights are protected, keep you well-informed every step of the way, and help you receive the utmost protection bankruptcy can offer. To schedule a free consultation with a bankruptcy lawyer in Tampa call us today at 800 990 776