Book Review: How to File for Chapter 7 Bankruptcy

How to File for Chapter 7 Bankruptcy published by Nolo (www.nolo.com) and written by Albin Renauer, J.D., Robin Leonard, J.D., and Stephen Elias, Attorney, gives an individual thinking about filing bankruptcy checklists on whether the person qualifies for Chapter 7, how to cancel as much debt as possible, the court systems and bankruptcy petition completion, and how to rebuild credit after bankruptcy.  The book is a good starter to educate or calm someone fearful of the bankruptcy process.

The book explains how Chapter 7 differs from other types of bankruptcy.  Chapter 7 bankruptcy discharges all a person’s debts immediately and is well suited for individuals who do not have many assets such as renters. There is not much to lose when a person only has exempt property like furniture.

In a Chapter 7, a person can own a house and exempt some equity in the house, but if income is over a certain threshold, a debtor cannot file for Chapter 7. Chapter 13 is for individuals whose income keeps them from filing Chapter 7, or who have significant assets they desire to keep.  In bankruptcy, a trustee may sell off a person’s assets to pay off the debts to creditors.

A person may go through a Chapter 7 within a year, while a Chapter 13 may take several years.  In Chapter 13, a person needs to pay off some of the debts through a three to five year repayment plan. The person makes monthly payments to the trustee who then delivers the money to creditors.

When a person incurs more debt than he can pay off, the bankruptcy system helps the person get a fresh start from financial woes.  In How to File for Chapter 7 Bankruptcy, read by many attorneys, not just common people not educated in the laws, there is user-friendly information on how to complete a bankruptcy petition, and explanation on bankruptcy terminology.

The 17th edition contains information on state exemption laws, which determine what property an individual can keep in bankruptcy like clothing.  These laws are important for someone who can be considered a citizen of more than one state.  A person may decide to file bankruptcy in a state where s/he can keep more of his/her assets.  A person does not need to lose all his/her assets when s/he cannot repay debts.

For example:  Assume a person has $300,000 in unsecured credit card debt, rents a condo, and owns a truck.  Other than clothing and a sofa, the individual does not own any other assets.  Assume the individual earns $2,000 per month and monthly expenses are $5,000 per month.  Spending more money each month than what a person is making leads to no income from which to pay creditors.  With no money left to pay creditors each month, the person can file Chapter 7 and get the $300,000 in credit card debt discharged.  Once discharged, the person will no longer owe that debt when the bankruptcy case closes.

Learn more about Chapter 7 bankruptcy from an experienced New York bankruptcy attorney.