Chapter 7 – Details

Whether to file a Chapter 7 or Chapter 13 bankruptcy case is usually determined by what kind of debt a person has. Chapter 7 bankruptcy is designed for people who have unsecured debts beyond their ability to pay. Common examples of unsecured debts are:

  • credit card bills, medical bills, utility bills,
  • payday loans, signature loans,
  • payments or other amounts due under a lease of property,
  • and some types of taxes.

The primary benefits of filing a Chapter 7 are the “automatic stay,” which stops nearly all creditors from continuing collection action of any kind after the Chapter 7 is filed, and the “discharge” entered at the end of the Chapter 7 case, which in most cases wipes out all unsecured debts.

The “automatic stay” stops all of the following collection actions:

  • Collection calls
  • Collection letters
  • Wage garnishments
  • Foreclosure actions
  • Repossession actions
  • Lawsuits to collect a debt
  • Utility shut offs

Most people’s biggest fear when contemplating a bankruptcy filing is losing their property to the bankruptcy court. In 99% of our Chapter 7 cases, our clients keep all of their property, and in the 1% or less of our cases that present the risk of losing a certain item of property, we are aware of that risk before the case is filed and we formulate a plan with our client to deal with that risk. Our job is to eliminate surprises and make the process as predictable as possible.

In terms of the timeline of a Chapter 7 case, it typically takes about 100 days from the date the case is filed until the date the case is closed and the discharge entered. In 99% of our Chapter 7 cases, our clients only need to attend one hearing during the case, called the “341 meeting” or “meeting of creditors,” which takes place at the Federal Courthouse at 517 E. Wisconsin Ave. in Milwaukee for our clients living in Southeastern Wisconisn. Although most of our clients have a lot of anxiety about having to attend the 341 meeting, we prepare our clients for the hearing so that they know what to expect and nearly all of our clients breathe a sigh of relief on the way out of the courthouse and tell us that it wasn’t as bad as they thought it would be. If no problems arise at the 341 meeting, and they usually don’t, then we tell our clients to watch their mail for the notice of discharge mailed by the court about 100 days after the case is filed. Except in very rare cases, once the notice of discharge is mailed by the court, the case is closed, leaving our clients with a fresh start on their future.

For more detailed information about Chapter 7 bankruptcy.

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