Filing bankruptcy in Missouri is fraught with myths and inaccurate information. Like most big, bad scary things, its reputation derives from tidbits of truth and lots of embellishment. But it's not nearly as frightening once you know the facts. With that in mind, here are a dozen misconceptions about bankruptcy.
The Most Common Questions Asked About Chapter 7
What is Chapter 7 and how does it work?
Chapter 7 is that part of federal bankruptcy laws which permits a person to discharge most debts by filing a case in the bankruptcy court, turning nonexempt property over to a Trustee, and obeying the orders and rules of the Court. A person who files under Chapter 7 is called a Debtor.
What is a Chapter 7 discharge?
It is a court order releasing a Debtor from all personal liability on dischargeable debts and ordering Debtors creditors not to collect or even attempt to collect from the Debtor. A debt that is discharged is one for which the Debtor’s personal responsibility is eliminated and which the Debtor does not have to pay. Some debts, however, are not eliminated by a Chapter 7 discharge, and some persons are not eligible for a Chapter 7 discharge.
What debts are not eliminated by Chapter 7 discharge?
The following types of debt cannot be discharged under Chapter 7:
(a) debts for most taxes, especially taxes that have become due within the last three years, taxes for which a return was not filed by the Debtor, payroll taxes (so-called trust fund taxes), or taxes for which a fraudulent return was filed;
(b) if a creditor files a complaint and if the court so rules, debts for obtaining money, property, services, or credit by means of false pretenses, fraud, or false financial statements (included here are debts exceeding $500.00 for luxury goods or services or cash advances incurred within 90 days before the case is filed);
(c) debts not listed on the Debtor’s Chapter 7 papers (which is one reason it is critical to list all your creditors);
(d) if a creditor files a complaint and if the Court so rules, debts for fraud, embezzlement, or larceny;
(e) debts for alimony, maintenance, or child support;
Contact Drew Frackowiak Attorneys At Law today at 913-381-7654 when bankruptcy threatens.
