The legal duties associated with a Chapter 7 bankruptcy filing

June 15, 2013

The legal duties associated with a Chapter 7 bankruptcy filing

Article provided by Cantu & Hickson
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Individuals who are contemplating filing for bankruptcy protection might not realize that there are two primary options of personal bankruptcy that they can choose from -- Chapter 7 bankruptcy and Chapter 13 bankruptcy. Chapter 13 is primarily used by individuals who have steady income and wish to repay their debts. The Chapter 13 bankruptcy filing will give the filer an opportunity to use a repayment plan that can last between three to five years, depending on the circumstances.

A Chapter 7 bankruptcy filing, however, is the most common choice for those interested in filing for bankruptcy protection. With a Chapter 7 filing, most of an individual's unsecured debts will be eliminated, with certain exceptions.

What are a debtor's responsibilities under a Chapter 7 bankruptcy?

According to the United States Bankruptcy Court for the Southern District of Texas, individuals who file for Chapter 7 bankruptcy protection have obligations to the trustee assigned to the case that must be fulfilled. Some of those obligations include:
-Providing the trustee assigned to the case with written notice of any inheritance money received as a result of someone's death
-Providing written notice to the trustee of any money received as part of a final divorce decree that occurred prior to the bankruptcy filing or within six months after the date of the petition
-Providing the trustee with written notice of any contracts or leases that require the individual to provide future services or property for compensation

The list is just a short representation of the many duties and obligations of an individual who files for Chapter 7 bankruptcy protection. Any filer who does not perform his or her obligations as required might be subject to criminal prosecution, as well as a revocation or a denial of discharge.

Qualifying for and discharging debts under Chapter 7 bankruptcy

According to the United States Courts website, there are a few things that a bankruptcy court will have to consider prior to allowing an individual to file for Chapter 7 bankruptcy protection. The court will review a filer's income, the size of the filer's family and his or her expenses. Additionally, an individual must attend credit counseling within six months of filing. Those who are not eligible for Chapter 7 may be able to file under Chapter 13.

An individual who files for Chapter 7 bankruptcy protection might be able to eliminate most of his or her unsecured debts, including old medical and credit card debt. Individuals should note, though, that certain debts, such as past-due child support and student loans might not be discharged. Anyone who is interested in filing for bankruptcy protection might want to seek counsel from a skilled attorney prior to making any final decisions. A bankruptcy attorney can help an individual determine the legal duties associated with Chapter 7 bankruptcy protection and to determine a filer's eligibility.