Chapter 7

Distraught woman with bankruptcy notice

Distraught woman with bankruptcy notice

While most people have heard of bankruptcy, many people do not know exactly what to expect. There is a lot of incorrect information out there, and before you make a decision, it is important to have an experienced attorney set things straight: Chapter 7 bankruptcy is a way to discharge many of your unsecured debts and get a fresh start.

At The Gulley Law Firm, we help individuals and families get a fresh financial start through Chapter 7 bankruptcy. If you can no longer keep up with your monthly credit card and loan payments because of a job loss, medical bills or other financial setback, Chapter 7 may be the best way to get your financial future back on track.

Honest Counsel for Honest Debt Solutions

Whether you are fighting foreclosure or struggling with medical bills, you do not need false hopes and a sales pitch — you need relief. As a complete liquidation plan, Chapter 7 bankruptcy will allow you discharge almost all of your unsecured debt. We will educate you about the bankruptcy process make sure you understand all the steps we will take, so you know what to expect.

Why File a Chapter 7 Bankruptcy?

Dollars & Sense analysis:

The dollars and sense analysis is a way of helping potential clients understand why filing for Chapter 7 may be the best option for you.  If you are currently thousands of dollars in debt with added interest and late fees to boot, filing a Chapter 7 all comes down to dollars and sense.  Why continue to drown yourself in the never ending pile of debt month after month when you could hire an experienced attorney to completely discharge your never-ending mass of debt for good?

Paying back your creditors over time versus discharging your debt:

Depending on how deeply entrenched you are in debt, it could take years to pay back the principal, plus interest, plus late fees associated with your debt.  By filing Chapter 7, in as little as 90 days, you will be able to start anew sooner than later, and begin living your life again without the constant cloud of debt hovering over your life.

Stigma of filing Bankruptcy:

Many people struggle with the stigma attached to filing Chapter 7 bankruptcy.  Yes it is true, a Chapter 7 bankruptcy will stay on your credit for 7 years.  However, if your credit is already low due to late payments, judgments, garnishments, late payments, repossessions, etc., filing Chapter 7 can help you to rebuild your credit faster than if you pay back your debt over time!  It is far easier to rebuild your credit from scratch than it is to climb your way out of a bad situation.  A Chapter 7 bankruptcy can give you the fresh start you need!

Myths about your credit:

Many people are under the mistaken belief that if there is a Chapter 7 bankruptcy on your credit, you cannot make any new purchases for 7 years until the bankruptcy is removed by the credit bureaus.  WRONG! Many creditors are more apt to deal with potential debtors when they have no outstanding debts, which in turn will help you raise your credit score!  Many time people find that they can even buy a new car and get new credit cards almost immediately after being discharged.


First, you must know whether or not you qualify to file a Chapter 7 bankruptcy.  To qualify you must be able to pass the Means Test.  The Means Test was designed to prevent people from abusing the bankruptcy system and discharging debts that they can afford to pay back.  Therefore, the Means Test is designed to calculate your current monthly income, which is then compared to the statewide average medium income based on household size to see if your income qualifies you to file for a Chapter 7.  This process can be simple or complicated; this is why you need an attorney to walk you through the process.

Upon filing your bankruptcy petition, in most instances, you will be granted an automatic 90 day “stay” for certain collection efforts against you and your property – the “stay” means that creditors must immediately cease their collection efforts.  What this means for you is that your creditors can no longer garnish your wages/bank account, debt collectors must stop calling you, and foreclosure and repossession efforts must cease immediately against your property.  However, there are times when you might not be granted an automatic stay, or your creditors can petition the courts to lift the stay and resume their collection efforts.  This is why it’s of utmost importance to have an attorney handling your matter!

Approximately 30 days after filing the petition you will be scheduled for a 341 Hearing/ Meeting of the Creditors.  This is a meeting between you and the Chapter 7 bankruptcy Trustee where your creditors may show up to state their objections to your ability to discharge the debts that you owe them.  The typical creditor, such as with credit card debts, usually will not show up for the 341 Meeting of the Creditors.  However, as it has the possibility of happening, it is always best to have an experienced attorney with you at the 341 Hearing to represent your interest.

Your creditors will be given 60 days from the date of your 341 Hearing to object to the dischargibility of certain debts.  If there are objections, it is important to have an attorney by your side to help answer any objections your creditors may have to ensure your Chapter 7 bankruptcy is adequately discharged.

Finally, if there have been no objections to the dischargibility of your debt, or once all objections have been accounted for, your Chapter 7 bankruptcy will be concluded, and the majority of your debts (if not all) will be discharged.