Bankruptcy provides a fresh start of sorts, but as with most legal matters, there are technicalities and fine print to consider. A bankruptcy attorney in McKinney, TX can do more than help with filing and documentation; they can explain the fine print in easy-to-understand terms. With this guide, readers can learn important facts about chapter 7 bankruptcy.
How Discharge Affects Creditors and Liability
When a debtor gets a chapter 7 discharge, they’re released from liability for most debts and collection attempts are stopped. If the debt is significant, a creditor may get some money, but only when non-exempt assets are sold by the court-appointed trustee. Creditors are left without a basis upon which to collect past debts.
Which Debts Are Eliminated
Typically, filers consult an attorney during this part of the process. While a debtor can expect most of his or her debts to be discharged, some of their high-value assets may be sold. For instance, if a person lives alone and the home is valued in the high six digits, they may lose it. However, a bankruptcy attorney in McKinney, TX may be able to keep that from happening.
How Fast It Happens
In most cases, filers can expect a quick discharge unless a creditor objects. The process is typically completed 60 to 90 days after filing and attending a court hearing.
Why Chapter 7 Cases Are Rejected
A person’s chapter 7 bankruptcy discharge can be rejected for a variety of reasons that depend on their personal situation. For example, if the person didn’t keep good financial records, can’t explain lost assets, or perjured themselves, the discharge can be denied.
A secured creditor may still be able to seize property in some situations, so it’s important for filers to have an attorney at this point in the process. If a person has a high-value asset such as a car, they can make an outside agreement to keep it and continue making payments. The creditor would then have the right to repossess the vehicle if payments aren’t made, even with a discharge in place.
As shown, chapter 7 discharge laws are quite complex. One thing a filer can do is to hire a local bankruptcy lawyer who can cut through all the fine print. Call the Law Firm of David S. Kohm today to schedule a consultation.