* most taxes;
* child support;
* alimony;
* most student loans;
* court fines and criminal restitution; and
* personal injury caused by driving drunk or under the influence of drugs.

The discharge only applies to debts that arose before the date you filed. Also, if the judge finds that you received money or property by fraud, that debt may not be discharged.

You can only receive a chapter 7 discharge once every eight years. Other rules may apply if you previously received a discharge in a chapter 13 case. No one can make you pay a debt that has been discharged, but you can voluntarily pay any debt you wish to pay. You do not have to sign a reaffirmation agreement or any other kind of document to do this so be careful.

The “debtor” is the party that either filed a voluntary bankruptcy petition or that had an involuntary petition filed against it.

The trustee, if any, must be distinguished from the US Trustee, who is a presence in every bankruptcy case. Generally, several United State Trustees work in each district office, and each bankruptcy case is assigned to an individual trustee. The United States Trustee has specific duties in bankruptcy cases under his or her watch – essentially these duties amount to an oversight function.

If you are an individual, you can get a discharge of all debts, other than debts declared nondischargeable under 11 USC Section 523, unless a creditor can establish a basis under 11 USC Section 727 to deny your discharge.

Your eligibility for Chapter 7 relief is governed primarily by the “means test” and the credit counseling and other requirements of 11 USC Section 109.  The credit education provision require that an individual receive a briefing on available credit counseling opportunities and assistance in performing a budget analysis from an approved, non-profit budget and credit counseling agency during the 180 days before filing for bankruptcy.

You must also complete a instructional personal financial management course before discharge is granted.

The means test is applicable to people with primarily consumer debt.  The test is set forth in Bankruptcy Code Section 707(b).  Under it, a person may not proceed under Chapter 7 if an objective formula-based analsis of the person’s income and expenses indicates that they will be able to repay some or all of what they owe to unsecured creditors.

If you have desires to retain nonexempt assets then you have to consider Chapter 13.

When you owe state or federal income taxes, you may wish to wait until the three year nondischargeability period has passed.

If you are under considerable pressure from creditors, however, you may not be able to wait.  Nevertheless, you should know about the following:

-  An inheritance likely to be received witin the 180 day period following the filing of the petition will become property of the estate.  In such circumstances, you may be able to take steps to disclaim the inheritance or suggest to the benefactor that the bequest be left to another party, such as your kids.

If any creditors proceeds with any action despite the stay, their actions are automatically void by the law.  You do not need to take any action.  They can also face possible legal consequences if the creditor takes action knowing you have filed you application.

For example, say you are rental space in the local mall for your business.  You file for bankruptcy and your landlord proves forward to lock you out.  The landlord can be found liable for your lost of business during the period that you were locked out of your business – preventing you from operating your business.

Commencement of a bankruptcy case creates an “estate.” The estate technically becomes the temporary legal owner of all the debtor’s property. It consists of all legal or equitable interests of the debtor in property as of the commencement of the case, including property owned or held by another person if the debtor has an interest in the property. Generally speaking, the debtor’s creditors are paid from nonexempt property of the estate.

The primary role of a chapter 7 trustee in an asset case is to liquidate the debtor’s nonexempt assets in a manner that maximizes the return to the debtor’s unsecured creditors. The trustee accomplishes this by selling the debtor’s property if it is free and clear of liens (as long as the property is not exempt) or if it is worth more than any security interest or lien attached to the property and any exemption that the debtor holds in the property. The trustee may also attempt to recover money or property under the trustee’s “avoiding powers.” The trustee’s avoiding powers include the power to: set aside preferential transfers made to creditors within 90 days before the petition; undo security interests and other prepetition transfers of property that were not properly perfected under nonbankruptcy law at the time of the petition; and pursue nonbankruptcy claims such as fraudulent conveyance and bulk transfer remedies available under state law. In addition, if the debtor is a business, the bankruptcy court may authorize the trustee to operate the business for a limited period of time, if such operation will benefit creditors and enhance the liquidation of the estate. 11 U.S.C. § 721.

Section 726 of the Bankruptcy Code governs the distribution of the property of the estate. Under § 726, there are six classes of claims; and each class must be paid in full before the next lower class is paid anything. The debtor is only paid if all other classes of claims have been paid in full. Accordingly, the debtor is not particularly interested in the trustee’s disposition of the estate assets, except with respect to the payment of those debts which for some reason are not dischargeable in the bankruptcy case. The individual debtor’s primary concerns in a chapter 7 case are to retain exempt property and to receive a discharge that covers as many debts as possible.

If you file for Chapter 7 , most of your unsecured debts are written off within 90 days of filing. The bankruptcy will stay on your credit report for 10 years. While debts will be forgiven, you’ll have to sell some of your property, with the proceeds distributed to your creditors. In most cases, this means you’ll lose your home (if you own it), as well as any expensive items such as art and jewelry, and pricey consumer electronics.

This year’s bankruptcy-filing totals are the state’s highest since 2005, when federally mandated changed to the bankrutpcy laws triggered a flurry of filings.

A growing number of people are being forced into bankruptcy because job losses and salry cutes have made it difficult for them to pay their bills.  Some have relied on credit cards to pay for even basic living expenses and now are seeking protection.

The law says you can use a Chapter 13 plan if you have a steady income. This means you work for wages, own a small business or receive pension, social security or other benefits. You also must owe less than approximately $750,000 in secured debts, such as a mortgage, and less than approximately $250,000 in other debts.

If you qualify for Chapter 13, you and your lawyer must work out a plan for the court to approve. The plan must show how you intend to pay all or part of your debts. Certain debts must be paid in full. These include secured debts, federal or state income taxes that you have incurred in the past three years, and the court, trustee and attorney fees involved in setting up and carrying out the plan.