Chapter 7 Bankruptcy Process


Utah Bankruptcy Attorney Explains the Chapter 7 Bankruptcy Process

The Difference Between Chapter 7 and Chapter 13 Bankruptcy

For consumers, the Chapter 13 and  Chapter 7 Bankruptcy Process of the United States bankruptcy code offer opportunity to move out from under unmanageable debt.  Essential differences between Chapter 7 and Chapter 13 include the following:

  • Chapter 7 is a liquidation bankruptcy.  Non-exempt assets are sold and proceeds are distributed among creditors. Upon completion of bankruptcy, debt is discharged.
  • Chapter 13 is a wage earner’s plan that enables debtors to keep their property.  Debtors repay all or some of their debt over a three- to five-year period.

The Chapter 7 Bankruptcy Process

For many, Chapter 7 is a more attractive bankruptcy option. It is a faster path to discharge of debt, providing a fresh financial start within a year.  However, eligibility for Chapter 7 changed in recent years.

Are You Eligible For Chapter 7 Bankruptcy?

In 2005, the federal government enacted the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA).  Legislators felt business interests and consumers were taking advantage of bankruptcy relief — specifically Chapter 7 liquidation.  BAPCPA tightened eligibility for liquidated bankruptcies, requiring more debtors to use Chapter 13, a plan that involves payback of some debt.

Why You Need A Utah Bankruptcy Attorney

Qualifying for Chapter 7 is now subject to a complicated means test.  Roughly, eligibility for Chapter 7 rests on whether your income is below the state median income of individuals or families in a similar situation.  Working with a Salt Lake City bankruptcy lawyer is essential for determining if you qualify for Chapter 7.

Hire One of the most Reputable Bankruptcy Lawyers   


Carl N. Anderson, III can help residents of Utah, Colorado and Nebraska through the complex and sometimes frustrating Chapter 7 bankruptcy process. Contact him online or at 801-285-0303 to arrange a free consultation today.

Get a Free Consultation