Chapter 7 Actions

chapt-7There are many events that can drive a person or couple into bankruptcy, but it usually involves financial devastation and an inability to keep current on payments for necessities such as housing and food. People often find themselves not making payments on one thing, so that they can make payments on another.

Most people believe that there are no options, even in bankruptcy, to eliminate some of the debt associated with a home, but this is not true.

Chapter 7 bankruptcy — also called “straight” or “liquidation” bankruptcy — is designed to give you a fresh start. It wipes out most types of debt, and in return the bankruptcy trustee sells (liquidates) your nonexempt property in order to provide partial repayment to creditors. But because most people have very little property that is not exempt, most Chapter 7 bankruptcy filers end up keeping most or all of their property.

Chapter 7 Actions

A debtor who files for Chapter 7 protection may take steps outside the bankruptcy court to modify the terms of his or her mortgage through the Home Affordable Modification Program (HAMP).  The act of filing for bankruptcy does not limit a person’s ability to seek a modification nor should the bankruptcy case influence whether or not a person qualifies for a modification.  It is possible for a person to get the debt on a HELOC discharged in a Chapter 7 case, but the creditor maintains its lien on the property, which means that a person could face a foreclosure action after coming through the bankruptcy.  A person may reaffirm the debt during the bankruptcy case in order to avoid legal actions after the case has been closed, but this only makes sense if the person has the means to stay current on the debt.  The fact is that most people with equity in a home pursue Chapter 13 rather than Chapter 7 bankruptcy protections.

We Can Help!

Charlton & Glover provides guidance to those considering a Chapter 7 Bankruptcy. Before you file for bankruptcy, there are many things that should be analyzed. If you live in the Roswell or Alpharetta area, the experienced bankruptcy attorneys at Charlton & Glover are ready to sit down with you and help you make the decision that works best for your circumstances. Call us at (770) 993-1005 to schedule a free initial consultation.

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