A discharge under a Chapter 7 bankruptcy releases an individual debtor from personal liability for most debts and stops the creditors owed those debts from taking any collection actions against the debtor. Chapter 7 bankruptcy discharge is subject to many exceptions; however, and debtors should consult competent legal counsel before filing to discuss the full scope of rights and options with respect to filing bankruptcy. Generally, individual debtors receive a discharge in more than 99% of Chapter 7 cases.
In most cases, unless a creditor, or other interested party, files a objection, and barring any other delays in process, the bankruptcy court will issue a discharge order and close the bankruptcy case within approximately 6 months of the date of filing. Where a debtor is represented by an attorney, other than the Chapter 7 filing appointment, the debtor will generally only be responsible for attending on required meeting of the creditors- date and time are assigned immediately after the bankruptcy case is filed.
Chapter 7 does not impose a maximum debt limit. Consequently, you can discharge any amount of debt. Further, it is a liquidation of debt; unlike a Chapter 13, you do not need to make any payment or create a payment plan. Chapter 7 bankruptcies are also shorter proceedings than Chapter 13, usually lasting no more than 6 months, as opposed to 3 to 5 years in a Chapter 13. Filing a Chapter 7 petition automatically stops most collection actions pending against the Debtor/petitioner: this includes wage garnishments, collection law suits, foreclosures, and even calls from bill collectors.
A Chapter 7 discharge can eliminate all a petitioner’s debts. In order to qualify for a Chapter 7 discharge, however, the debtor will need to satisfy a means test- one of the criteria to qualify for a Chapter 7 discharge is the Debtor’s household income cannot exceed a certain sum, subject to certain exclusions. Debtors should consult with an attorney to determine whether they satisfy the means test, and whether Chapter 7 is their best choice.