Herndon, VA Chapter 7 Bankruptcy Lawyers

Guidance for Eliminating Debt and Regaining Financial Stability

Debts can affect anybody, and they can accumulate due to financial issues such as the loss of a job or an unexpected illness. In situations where people are struggling with overwhelming debt, Chapter 7 bankruptcy can be the best way to receive a fresh start. This form of bankruptcy can eliminate most types of unsecured debts, allowing a person or family to move forward without the need to repay the amounts owed. The attorneys at The Law Firm of Ruiz Dougherty, PLLC provide effective guidance for clients during the Chapter 7 bankruptcy process. We can help debtors take steps to regain financial stability. With our experience in matters related to immigration, we can help address the unique concerns faced by immigrants who plan to file for bankruptcy.

Types of Debts That May Be Addressed Through Chapter 7 Bankruptcy

A bankruptcy under Chapter 7 can eliminate multiple types of debts, providing substantial relief for debtors. This form of bankruptcy can be used to address debts such as:

• Credit card debts: These are some of the most common forms of debt that people may accrue, especially in situations involving unexpected expenses. Because of their high interest rates, credit card balances can be difficult to pay off.
• Medical bills: Unexpected illnesses or accidents may lead to significant medical expenses, even for those who have health insurance. Bills for emergency treatment, hospitalization, surgeries, or other forms of treatment can add up quickly, leading to financial difficulties for a family.
• Personal loans: People may receive unsecured loans from banks, family, or friends, and they may struggle to make ongoing payments due to financial difficulties.
• Utility bills: Past-due payments for services such as electricity or gas can add up quickly, and utility companies may take action to collect the amounts owed.
• Certain tax debts: While taxes owed to the IRS or to state agencies will typically need to be repaid, there are some cases where older tax liabilities can be discharged if certain criteria are met.

Not all debts can be eliminated through bankruptcy. Obligations such as student loans, recent tax debts, alimony, and child support are generally not eligible for discharge under Chapter 7. While debts secured by collateral, such as home mortgages or auto loans, can be discharged through Chapter 7, this will usually result in the lender taking possession of the collateral through a home foreclosure or repossession.

Qualifying for Chapter 7 Bankruptcy

To receive debt relief under Chapter 7, a debtor must meet certain requirements under a means test that will review their income and financial resources. In general, a person may qualify for Chapter 7 bankruptcy if their income is below the median income for a household of their size in Virginia. Those who earn more than the median income may still be able to file for Chapter 7 if they can demonstrate that they do not have enough disposable income to repay a significant portion of the debts they owe.

The Chapter 7 Bankruptcy Process

Filing for Chapter 7 bankruptcy involves several key steps:

1. Credit counseling: Before filing for bankruptcy, a person will be required to complete a mandatory credit counseling session. Counseling must be completed within six months prior to filing.
2. Filing the bankruptcy petition: The bankruptcy process officially begins by filing a petition with the local bankruptcy court. This filing will also include schedules of assets, debts, income, expenses, and a statement of financial affairs.
3. Automatic stay: Upon filing, the court will implement a stay on collection actions. This will stop creditors from taking any steps to collect debts, including garnishing a debtor's wages, proceeding with foreclosures or repossessions, or contacting the debtor to request payments.
4. Meeting of creditors: Approximately one month after filing for bankruptcy, the debtor will attend a meeting where the trustee assigned to their case can ask questions about financial issues.
5. Liquidation: The bankruptcy trustee may take steps to seize any non-exempt assets the debtor owns and liquidate these assets to pay creditors.
6. Debt discharge: Within 60 to 90 days after the meeting of creditors, the court will issue an order discharging all eligible debts. This will complete the bankruptcy process, and the debtor will not be required to repay any debts that have been discharged.

Chapter 7 Bankruptcy Considerations for Immigrants

Immigrants may have additional concerns when filing for bankruptcy. They may be unsure about how a bankruptcy filing could affect their immigration status or their ability to receive visas or Green Cards. It is important to understand that anyone who is a permanent resident of the United States or who owns property in the U.S. can file for Chapter 7 bankruptcy. The attorneys at The Law Firm of Ruiz Dougherty, PLLC can provide guidance on the best ways to handle these sensitive issues. We ensure that our clients are well informed about the implications of bankruptcy on their immigration status or their ability to apply for citizenship.

Contact Our Herndon, Virginia Chapter 7 Bankruptcy Lawyers

In situations where large debts have led to financial difficulties, Chapter 7 bankruptcy may be the ideal option for you and your family. The compassionate attorneys at The Law Firm of Ruiz Dougherty, PLLC can help you take steps to eliminate your debts and move forward into a more secure financial future. Reach out to us at 571-441-2233 to set up a free consultation.