The principal reason for filing a bankruptcy under Chapter 7 of the Bankruptcy Code is to find relief from the crushing weight of credit card debt, medical debt and utility debt. Upon completing your bankruptcy you will receive an Order of Discharge which discharges you of all dischargeable debts. Once you receive an Order of Discharge, your creditors are barred from any form of collection and the debts are, essentially, eliminated. They can never call you, write to you or harass you in any way. You are protected by the permanent discharge injunction.
The filing of a bankruptcy under Chapter 7 also serves to stop civil lawsuits which have been filed against you. The filing of a bankruptcy under Chapter 7 will stop all civil process so, for example, if you are concerned that the Sheriff's Department is about to tag your property, the filing of the bankruptcy will stop this.
If your property is scheduled for Sheriff's Sale, the filing of the Chapter 7 will stop this, as well, but only for a limited period of time. See also Chapter 13.
If you have been sued in court and need to respond to the documents which have been filed against you, the filing of the bankruptcy will, normally, eliminate the need to do so.
If your property is scheduled for Tax Sale, the filing of a Chapter 7 will stop the sale but only for a limited period of time. See also Chapter 13.
In a Chapter 7 bankruptcy, you pay no money to your discharged creditors or payments to a Trustee.
If you file a Chapter 7 bankruptcy, a Trustee will review your case with you and me - one time. It is referred to as a Meeting of Creditors. Rarely, if ever, do creditors actually take part in this process. Common Chapter 7 Trustee Questions
The determination of whether an individual qualifies for a Chapter 7 bankruptcy is a complex
process. However, one of the most significant issues to consider is whether or not the individual
who needs to file a bankruptcy earns an annual income which is above or below the Median Family
Income. In general, if the individual's income is below the Median Family Income, then it is
substantially more likely that the individual qualifies for Chapter 7. If, however, the
individual's income is over the Median Family Income, then it is substantially more likely that
the individual does not qualify for a Chapter 7 bankruptcy.