CHAPTER 7 bankruptcy is designed to give you a fresh start. It eliminates "unsecured" debt, which basically means debt that has no collateral attached to it. Credit card debt is the most common type of unsecured debt. Other types of unsecured debt include personal loans, medical bills, utility bills and most lawsuit money judgments.

"Secured" debt is the type of debt that has something attached to it (collateral). Mortgages (attached to houses) and car loans (attached to vehicles) are common types of secured debt. These are not really the subject of a Chapter 7 bankruptcy but do get dealt with. Most often you have the choice whether or not to keep these debts. If you decide to keep the debt and keep paying it, you can keep the collateral attached to it. If you can no longer afford to pay that debt you can "surrender" (give back) the property and be off the hook for it.

Nearly all Chapter 7 filers keep all of their possessions, including their home, vehicles and personal items. The Bankruptcy Code provides these "exemptions" for your most commonly held assets. It is only non-exempt property that may need to be liquidated to provide partial or full repayment to your creditors. The attorneys at Baaden & Hirschey, P.C. are experts in helping you protect your assets when you file for bankruptcy.

The instant your bankruptcy case is filed by Baaden & Hirschey, P.C., the court issues an "automatic stay" which puts an immediate stop to all collections activities including phone calls, letters, lawsuits and wage-garnishment. It will also release any frozen bank accounts. When the Court issues a Chapter 7 "discharge" a few months after filing, your unsecured debt is wiped out and you will never have to pay it back or be subject to collection for it.

To be eligible for Chapter 7 bankruptcy, your income needs to be under a certain amount of money based on your expenses and family size (commonly referred to as a "means-test"). The skilled and experienced attorneys at Baaden & Hirschey, P.C., are fully familiar with means-test guidelines and can quickly determine if you are able to file for Chapter 7.