Chapter 7 bankruptcy is a type of bankruptcy under which you may be eligible to file. Whether or not you qualify for Chapter 7 bankruptcy depends on a variety of factors, but is largely determined by your income in relation to the state of Virginia's median income and your ability to pay off your debts in a reasonable amount of time. If you meet these particular requirements, you can file for Chapter 7 bankruptcy, and can begin taking the steps toward a financially sound future and life after bankruptcy. Chapter 7 provides the following:

  • Discharges all unsecured debts, including credit card debt, medical bills, and debts from repossession or foreclosures
  • Stops garnishments and lawsuits
  • Stops collection activities from creditors and debt collection agencies


Chapter 7 of Title 11 of the U.S. Code involves the liquidation of all non-exempt assets. This means all of a debtor's nonexempt property will be relinquished and the proceeds will be distributed to creditors. This provision usually affects less than 2% of our clients. Any secured debt, such as a home loan, may be subject to liens and mortgages that place the property under the control of the creditor. In addition, the U.S. Bankruptcy Code allows debtors to keep certain exempt property that are determined by Virginia's exemptions and certain federal exemptions. Examples of exempt property can include insurance and pensions, certain personal property, and tools or instruments used in your occupation or education, among others. An attorney from our firm can assist you in determining your exempt property.


One of the main purposes of Chapter 7 bankruptcy is to allow debtors to discharge certain unsecured debts. Unsecured debts, such as medical bills and credit card debt, are those in which credit was based entirely on an evaluation by a creditor of the debtor's ability to pay. Secured debts, on the other hand, are debts in which a creditor has rights to seize collateral when a debtor defaults on their payments, such as in mortgages, foreclosures, car loans, and repossession.

A discharge releases debtors from personal liability for most unsecured debts. This means that creditors or debt collection agencies to which you owe debts will be prevented from taking any collection actions against you while the bankruptcy is pending. Statistics show that Chapter 7 actions allow debtors to receive a discharge in more than 99% of cases. Once you receive a discharge for you debts, creditors are no longer allowed to initiate or continue any legal or civil action against you. There are many factors that can affect how your debts will be discharged, and having the skilled legal counsel our firm can provide can explain and clarify the scope of your discharge.

The federal government developed the bankruptcy code and bankruptcy laws to help those in need, not to punish them. New legislation is a great indicator of the federal government's acknowledgement of a rough American economy. Bankruptcy no longer has the unsavory social stigma it once had, and for many people, it proves to be the healthiest and wisest option. Discharging your debt can provide you with a fresh start, allowing you to focus on remaining current on significant expenses and affording you the breathing room to straighten and organize your finances in preparation for your future.


David McCormick Law Group is prepared to assist anyone interested in filing under Chapter 7 bankruptcy. Our experienced attorneys can assess your case, determining if your situation meets the requirements for Chapter 7 and evaluating your comparative options or alternatives to bankruptcy in order to develop a legal and financial strategy that will best benefit you. With more than 17,000 clients served, we have helped a variety of people understand Chapter 7 bankruptcy and its impact on their lives. To discuss the particularities of your case or to set up a free case evaluation, contact us as soon as possible.

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