Chapter 7 Bankruptcy

Chapter 7 bankruptcy eliminates a person's legal obligation on unsecured debt such as medical bills, credit card balances, and payday loans while allowing the debtor to keep his or her home and car.

To successfully file for Chapter 7 bankruptcy, you have to meet the following requirements:

• Must not have filed a previous Chapter 7 bankruptcy within the last six years
• Must not own any major assets, such as massive equity in a home or a new car that is paid in full
• Must not have a high income unless you also have correspondingly high expenses

If your car is overfinanced and the car payment is upside-down, Chapter 7 can eliminate the overfinanced portion of the debt and reduce your payments. Similarly, if you have furniture, computer, TV, or stereo equipment debt, the creditor can choose to settle the debt for a reduced amount, eliminate the interest rate on the original debt, and reduce the monthly payment.

If you are considering filing for Chapter 7 bankruptcy, you should speak to an experienced attorney about your case. Contact Mehlman TerBeek LLP at 925-935-3575 for a free consultation.