Debtors whose debts are primarily consumer debts are subject to a "means test" designed to determine whether the case should be permitted to proceed under Chapter 7 (if the debts are primarily non-consumer debts then the debtor is not subject to a "means test"). If your income is greater than the median income for your state of residence and family size, in some cases, creditors have the right to file a motion requesting that the court dismiss your case under §707(b) of the Code. It is up to the court to decide whether the case should be dismissed.
Under Chapter 7, you may claim certain property as exempt under governing law. A trustee may have the right to take possession of and sell the remaining property that is not exempt and use the sale proceeds to pay your creditors.
The purpose of filing a Chapter 7 case is to obtain a discharge of your existing debts. However, if you are found to have committed certain kinds of improper conduct described in the bankruptcy code, the court may deny your discharge and, if it does, the purpose for which you filed the bankruptcy petition will be defeated.
If you receive a general discharge, some particular debts are not discharged under the law. Therefore, you may still be responsible for some taxes (taxes require a detailed discussion with attorney) and student loans, debts incurred to pay non-dischargeable taxes, domestic support and property settlement obligations, most fines, penalties, forfeitures, and criminal restitution obligations, certain debts which are not property listed in your bankruptcy papers and debts for death or personal injury cases by operating a motor vehicle, vessel or aircraft while intoxicated from alcohol or drugs. Also, if a creditor can prove a debt arose from fraud, breach of fiduciary duty, theft or from willful and malicious injury, the bankruptcy court may determine the debt is not discharged.
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THERE ARE BENEFITS AND DETRIMENTS TO ANY BANKRUPTCY, AND YOU SHOULD SEEK PROFESSIONAL COUNSELING BEFORE FILING A BANKRUPTCY. RALPH SCOTT BOWIE IS A BOARD-CERTIFIED CONSUMER BANKRUPTCY ATTORNEY AND A BOARD-CERTIFIED BUSINESS BANKRUPTCY ATTORNEY, CERTIFIED BY BOTH THE AMERICAN BOARD OF CERTIFICATION AND THE LOUISIANA BAR ASSOCIATION BOARD OF LEGAL SPECIALIZATION. WHEN YOU ARE CONSIDERING HIRING A BANKRUPTCY ATTORNEY, YOU HAVE A RIGHT TO KNOW WHICH ATTORNEYS HAVE MET THE STRINGENT STANDARDS FOR CERTIFICATION AS AN ATTORNEY. WHY SETTLE FOR ANYTHING LESS? CALL US IN SHREVEPORT AT 318-221-0600, OR IF YOU ARE OUT OF TOWN CALL US ON OUR TOLL FREE NUMBER 1-800-256-9470 FOR AN INITIAL FREE CONSULTATION TO DISCUSS OPTIONS IN BANKRUPTCY TO RESOLVE YOUR PROBLEMS.