All About Chapter 7: A Basic Outline of Chapter 7 Bankruptcy Law

A liquidation bankruptcy, Chapter 7, is available for people who have little, if any, disposable income. Before you hire a bankruptcy lawyer in Glendale, AZ to file Chapter 7 bankruptcy on your behalf, take a moment to find out more about the process. Then, you will know whether or not Chapter 7 is the right choice for you.

The Chapter 7 Means Test

In order to file Chapter 7, you have to pass the means test. The test takes your average income and deducts certain monthly expenses to determine your disposable income. Your disposable income is calculated to determine if you have enough to repay some of your debts. If you do, you will not pass the means test. At that point, your bankruptcy lawyer in Glendale, AZ can go over Chapter 13 bankruptcy with you.

It is worth noting that if your monthly income before deducting your disposable expenses is lower than the state median income, you automatically pass the means test.

How Chapter 7 Works

Once you file Chapter 7, the court will assign you a bankruptcy trustee. Your trustee is entrusted with the obligation to administer your bankruptcy estate.  Part of that responsibility is to sell your nonexempt property to pay off creditor claims. You will not have to pay off any of the creditors out of your own pocket. It all comes from your property. This allows debtors to discharge debts quickly. In fact, Chapter 7 bankruptcy is usually discharged in 4  to 5 months.

What If There Isn’t Anything to Sell?

It is common that trustees cannot find any nonexempt asset of value to sell during a Chapter 7 bankruptcy. If that is the case, the creditors do not receive any disbursement from the bankruptcy estate.

Debts That Aren’t Discharged

Some debts are not discharged with a Chapter 7 bankruptcy. Certain debts survive all types of bankruptcy, such as child support, student loans, and the majority of tax debts. Your bankruptcy lawyer in Glendale, AZ will work to get as many of your debts discharged as possible. Your lawyer will also give you a good idea of which debts will survive your bankruptcy discharge.

Your bankruptcy lawyer in Glendale, AZ can help you with the entire process. He will help you file Chapter 7 bankruptcy and get it discharged as quickly as possible so you can get back on your feet and start rebuilding your credit.


This blog is intended as a general discussion of legal issues and not as a statement of fact, legal advice or a legal opinion. No attorney-client relationship is created by this blog. Do not act or rely upon law-related information in this communication without seeking the advice of an attorney licensed to practice in the relevant area.

This blog article was created by Larry P. Karandreas, Esq., on behalf of the Law Offices of Larry P. Karandreas, P.L.L.C., A Lawyer Who Cares™, which concentrates its practice of law to Chapter 7 and Chapter 13 Bankruptcy, and in Debt Negotiation. If you live in or near Phoenix, Glendale, Scottsdale, Peoria or the Surprise, Arizona area and want legal advice or help – please visit the firm website for more information to schedule a free telephonic consultation. You really have nothing to lose but your debt.
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