Chapter 7 Bankruptcy, also known as No-Asset Bankruptcy, is available to a consumer whose income is below the median income and who does not have any assets available to be distributed among the creditors. However, that does not mean that the debtor has to be dirt poor in order to be qualified to seek relief under this chapter. The Bankruptcy Code allows every debtor to retain certain real and personal property in the event of a Chapter 7 discharge, e.g., primary residence held as tenancy by entirety, almost all of debtor’s retirement accounts, a vehicle, certain bank accounts, etc.
The process of filing for bankruptcy is simple. When a bankruptcy petition is filed, a Bankruptcy Trustee is appointed to the case and a meeting of creditors is scheduled by the Bankruptcy Court. The debtor and his attorney are required to attend that meeting. At the meeting, the Trustee determines whether there are any of debtor’s assets available for distribution to the creditors. If no assets are available, the Trustee issues a No Distribution report. It is important to note that an automatic stay comes into affect the moment a debtor files for bankruptcy. Contact us to discuss the process and to determine if you will be qualified to get a relief under this Chapter without forfeiting any of your assets.