Chapter 7 Bankruptcy
A few things happen after a Chapter 7 Bankrutpcy petition is filed. First, an automatic stay is triggered. This stay stops most collections, lawsuits, wage garnishments and creditors from otherwise contacting you. Chapter 7 will also halt any future foreclosure sales.
Second, once you file your assets automatically get placed into the bankruptcy estate. Understanding your assets and their value is critical before filing Chapter 7. The Chapter 7 trustee controls your property in this bankruptcy estate until he or she abandons your property and your case is closed. The good news is that we can usually “exempt” and protect most if not all of your property, meaning you often get to keep everything even though you get rid of your debts. Disclosure and honesty are the keys here: you want to be honest with your attorney about your assets so that they can be protected.
A Chapter 7 bankruptcy is fundamentally about two things: discharging your debts and protecting your property. Exemption laws vary from state to state and will also vary depending on your particular circumstances. Working with a competent and experienced bankrutpcy attorney is a great way to ensure that your assets are protected through the process.