Chapter 7 Bankruptcy Explained - San Jose Bankruptcy Lawyer


Bay Area Debt Relief Attorney

If you feel overwhelmed with debt, harassing phone calls, threat of mortgage foreclosure, and / or IRS tax debt, then bankruptcy can give you a fresh start. Once you file bankruptcy, all debt collection stops. You can have peace of mind again.  There is light at the end of the tunnel.

Learn More About Chapter 7:

What is Chapter 7 Bankruptcy?

If the majority of your debt is credit card debt, medical bills or other unsecured debt, then your best option (should you qualify) is a Chapter 7 also called straight bankruptcy.   A Chapter 7 bankruptcy discharges all of your unsecured debts. After you complete a Chapter 7, then have no further obligation to your creditors.

Chapter 7 bankruptcy is a liquidation proceeding in which the debtor's non-exempt assets, if any, are sold by the Chapter 7 trustee and the proceeds distributed to creditors according to the priorities established in the Code.

Eligibility to file Chapter 7 is determined by the means test.

In most consumer cases, all the assets are exempt (like your home and primary vehicle), and therefore there are no assets to liquidate and there is no dividend to creditors. Chapter 7 is generally the simplest and quickest form of bankruptcy and is available to individuals, married couples, corporations and partnerships.

What Can Be Discharged in a Chapter 7?

I am often asked by my clients, which debts can be discharged by a Chapter 7 and which ones cannot:

Debts That Can Be Discharged:

  • Personal loans
  • Credit cards
  • Repossession deficiencies
  • Auto accident claims
  • Medical bills
  • Judgments
  • Business debts
  • Leases
  • Guaranties
  • Negligence claims
  • Tax penalties over 3 years old

Debts That Cannot Be Discharged By Chapter 7:

  • Recent taxes
  • Trust fund taxes
  • Child or family support
  • Criminal fine or restitution
  • Accident claims involving intoxication
  • Debts not scheduled
  • Penalties payable to the government other than tax penalties
  • Student loans
  • Debts listed in prior bankruptcy where debtor was denied a discharge
  • Taxes for years where return unfiled or filed for less than 2 years
  • And secured debts (like your mortgage) cannot be discharged by Chapter 7.

Mortgages and Bankruptcy:

A mortgage must be paid in order to keep your house. If you are behind on your house payment and other debts that are secured by assets, then it might make more sense for you to file a Chapter 13. Chapter 13 bankruptcy is designed to help people when they are in financial trouble with more than just unsecured debt like credit cards and medial bills.

You Have Rights

Creditors will threaten you with letters and phone calls and often times leave you feeling overwhelmed and discouraged. Bankruptcy stops the madness. Once your lawyer has filed your bankruptcy case, an automatic stay is put in place BY LAW. All debt collection stops at that time. Even though it takes months to complete the bankruptcy proceedings, you get relief the moment your case is filed. No more phone calls, no more letters, and any pending foreclosure stops (if you act in time).

Don’t delay peace of mind. San Jose bankruptcy lawyer, Geoffrey Nwosu offers a free and completely confidential initial consultation.  Bing your debts and financial worries and leave with a sense of direction and peace of mind.  Call our law office today and schedule your free initial consultation.  Call 408-912-5983.

Law Offices of Geoffrey C. Nwosu

1710 Hamilton Ave.
San Jose, CA 95125

(408) 912-5983
(408) 375-7703



  • CAPTCHA image
    Enter the code shown above in the box below


Copyright Law Offices of Geoffrey C.Nwosu 2004 to 2010