Fayetteville Chapter 7 Bankruptcy Lawyers
Fayetteville Chapter 7 Bankruptcy Lawyers
Many people in the Fayetteville area experience the strain of unpaid bills, creditor harassment, and the fear of losing property. The constant pressure of overwhelming debt can affect nearly every aspect of life, from family relationships to physical health.
Wilmoth Law Firm provides guidance to individuals and business owners who are considering finding debt relief through filing Chapter 7 bankruptcy. The legal process can be difficult without support, and the consequences of filing improperly may be long-lasting. Clients turn to our Fayetteville bankruptcy lawyers for help with identifying if Chapter 7 is the most appropriate solution for their situation and complying with the court’s requirements.
What Is Chapter 7 Bankruptcy?
Chapter 7 bankruptcy is often called “liquidation” bankruptcy. It allows individuals to discharge most unsecured debts, such as credit card balances and medical bills. In exchange, the debtor may be required to surrender certain non-exempt property, which a bankruptcy trustee sells to pay creditors. Most Chapter 7 cases are completed in a few months and do not require repayment of debts beyond what is collected from the liquidation process.
Who is Eligible to File for Chapter 7 Bankruptcy?
Eligibility for Chapter 7 bankruptcy primarily depends on your income. An individual must pass a “means test,” which compares their income to the median income in their state. If your income is too high, you may not qualify for Chapter 7.
Additionally, individuals must complete a credit counseling course from an approved provider before filing.
How Does Chapter 7 Bankruptcy Affect Credit?
Chapter 7 bankruptcy does impact a person’s credit report. A Chapter 7 bankruptcy may remain on a credit report for up to 10 years. During this period, it may be more difficult to obtain loans, rent housing, or receive favorable interest rates. However, many individuals who file for bankruptcy already have low credit scores due to missed payments or defaulted accounts.
Filing for Chapter 7 can be the first step toward rebuilding credit by eliminating debt and stopping negative reporting from ongoing delinquency. After the bankruptcy process is complete, some of our Fayetteville bankruptcy lawyers’ clients qualify for new credit and loans within a few years, especially with consistent financial habits.
What Debts Cannot Be Discharged Through Chapter 7 Bankruptcy?
Some debts are not eligible for discharge under Chapter 7 bankruptcy law. These include most student loans, recent tax debts, child support, alimony, court-ordered fines, and certain judgments related to personal injury caused by intoxicated driving. In some cases, the court may decide not to discharge a debt if there is evidence of fraud or willful misconduct by the debtor.
It is important to list all debts accurately in a bankruptcy petition and to discuss each one with our Fayetteville bankruptcy lawyers to determine whether it may be discharged. Failing to include a debt or omitting required information may result in that debt remaining collectible even after the bankruptcy is finalized.
Can Chapter 7 Bankruptcy Stop Foreclosure or Repossession?
Filing for Chapter 7 bankruptcy may temporarily halt foreclosure proceedings or repossessions through what is called the “automatic stay.” This is a court order that takes effect immediately upon filing and prohibits most creditors from continuing collection efforts. The automatic stay can delay a foreclosure or repossession and give the filer time to address the issue.
However, in Chapter 7, the stay is temporary. If payments remain delinquent, the lender may eventually proceed with foreclosure or repossession. The outcome depends on the type of property, the amount of debt, and the filer’s ability to make current payments moving forward. Chapter 7 is generally not a long-term solution for saving a home or car if you cannot afford the payments.
What is the Chapter 7 Bankruptcy Filing Process Like?
Filing for Chapter 7 bankruptcy with our Fayetteville bankruptcy lawyers involves several steps. A credit counseling session with an approved agency is required before filing. Then, we help gather documentation related to income, assets, debts, and expenses. After the petition is filed with the bankruptcy court, a trustee is appointed to oversee the case.
The filer must attend a meeting of creditors, often called a “341 meeting,” where the trustee may ask questions about the filer’s financial circumstances. The Chapter 7 process typically ends with the discharge of eligible debts unless objections are raised.
Throughout the process, it is necessary to meet deadlines, respond to court requests, and remain in compliance with all filing requirements. Errors or omissions can lead to delays or even dismissal of the case. Those are key reasons why many people choose to work with our Fayetteville bankruptcy lawyers.
How Often Can I File for Chapter 7 Bankruptcy?
There are waiting periods between bankruptcy filings. For example, a person who received a Chapter 7 discharge must wait eight years before filing for Chapter 7 again.
These time limits apply to those seeking another discharge. In some cases, an individual may file even if not eligible for a discharge in order to benefit from the automatic stay. Our Fayetteville bankruptcy lawyers can help you determine if a new filing is permitted under current law and whether it would provide the intended relief.
Wilmoth Law Firm: Skilled Fayetteville Chapter 7 Bankruptcy Lawyers Who Help Clients Find Debt Relief
Financial strain will create long-term consequences unless you have a clear path forward. Our experienced Fayetteville Chapter 7 bankruptcy lawyers at Wilmoth Law Firm are ready to help. For a free consultation, call 479-443-8080 or contact us online. Located in Fayetteville, Arkansas, we serve clients in the surrounding areas.
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