Chapter 7 FAQS

Do I qualify for Chapter 7 Bankruptcy? 

It is generally very easy to qualify for Chapter 7 Bankruptcy. Most people  need of bankruptcy qualify for Chapter 7 relief, but there are at least 2  qualifications that must be met.  A debtor must pass the "means test", which is a calculator that uses the last 6 months of a debtors earnings  to determine what the debtor's income will likely be for the year. If a debtor's income exceeds the median income in the State of Utah for his or her family size, a more complicated analysis will need to be done to determine whether or not the debtor's income is too high to qualify for Chapter 7 relief.

Even if your family's income exceeds the median  amount, you often may still qualify for chapter 7 bankruptcy and should consult with the experienced bankruptcy attorneys at Morrison & Murff. 

The second qualification concerns previous discharges. If you have already filed for and received a Chapter 7 discharge within 8 years, a debtor will not be able to receive another Chapter 7 Discharge. A debtor can still file a chapter 13 bankruptcy however. 

Will I lose my house, car, furniture, or other personal assets in a Chapter 7 Bankruptcy?  

Very few debtors are ever required to turn over any assets in a Chapter 7 Bankruptcy case. This means most people that file for bankruptcy keep their house, their cars, their furniture, and everything else they own. Debtors are given exemptions to cover equity in their residence, motor vehicle, investments, household goods, life insurance, health aids, specified future earnings such as social security benefits and alimony, and certain other personal property.  If there are not enough exemptions to cover all assets owned by the debtor, then the case will be deemed an “asset case” and the trustee may then sell the nonexempt property and distribute the proceeds among the unsecured creditors.  Fortunately, the vast majority of cases are “non-asset” cases and therefore the debtor keeps ALL their property. 

If you do have non-exempt assets, an experienced bankruptcy attorney can help you structure and plan on how best to use or dispose of such assets prior to filing your Chapter 7 your bankruptcy without creating any problems later.  

If you think you might to file for Chapter 7 Bankruptcy, even in the future,  it is very important that you consult with an experienced bankruptcy attorney as soon as possible. The attorney can help you create a plan and best utilize the bankruptcy laws in your favor. 

How long will it take to rebuild my credit after filing for chapter 7 bankruptcy?

After the discharge, Debtors can start rebuilding their credit right away. Making on time payments with  new loans and credit cards help build credit. Debtors can see dramatic improvement in their credit scores within 12-18 months following a Chapter 7 discharge if they follow the advice of an experienced bankruptcy attorney. 

Is filing Chapter 7 Bankruptcy Easy? 

To get filed for Chapter 7 Bankruptcy, the debtor simply needs to complete a short questionnaire, and provide a few documents to the attorney. These include any pay stubs or pay statements received in the previous 6 months, tax returns for the previous 2 years, and take a online or telephone credit counseling class.  Many debtors can get this all completed in a day or two. 

At Morrison & Murff, we work hard to make filing bankruptcy a simple and easy process.  You can even file same day if you have a need.  

Once you file, you will have a brief meeting with a bankruptcy Trustee within  about 1 month. Sixty days from the meeting , the debtor will get their discharge.  The bankruptcy case will often close shortly thereafter, unless there are assets the trustee needs to administer or other tasks the debtor needs to complete. 

How much does Chapter 7 Bankruptcy Cost ? 

The Law Firm of Morrison & Murff offers very affordable rates and payment plans for Chapter 7 Bankruptcy. The cost for filing Chapter 7 Bankruptcy varies depending on your case so take advantage of a free consultation with an experienced bankruptcy attorney at the Law Firm of Morrison & Murff.