Chapter 7 bankruptcy, also known as “liquidation bankruptcy,” is one of the most useful tools for discharging, or eliminating, certain types of debt. If you’re facing overwhelming debt, the skilled South Dakota Chapter 7 bankruptcy lawyers here at 605 Bankruptcy are here to discuss your options and walk you through each step of the process. Contact us today to schedule your free initial consultation.
Who Is Eligible for Chapter 7 Bankruptcy in South Dakota?
Importantly, not everyone qualifies for Chapter 7 bankruptcy. To qualify, you’ll need to meet a wide array of specific legal criteria. Those criteria are as follows:
- Passing the Means Test: To qualify, your income must fall below the median income for a household of your size in South Dakota. If your income exceeds the median, further calculations assess your disposable income to determine eligibility.
- Residency Requirement: You must have lived in South Dakota for at least 91 of the last 180 days before filing to file in the state. This ensures jurisdiction in the South Dakota bankruptcy courts.
- Credit Counseling Course: Before filing, you’re required to complete a credit counseling course from an approved agency. This course educates you on financial management and bankruptcy alternatives.
- No Prior Bankruptcy Discharge: If you’ve filed for Chapter 7 in the past, at least eight years must have passed since your previous discharge to file again.
If you’re unsure about your eligibility, our knowledgeable South Dakota bankruptcy lawyers can perform a thorough assessment and guide you through the process.
What Debts Can Be Discharged Through Chapter 7?
Chapter 7 bankruptcy is designed to eliminate many types of unsecured debts, allowing you to start fresh. Common debts discharged under Chapter 7 include:
- Credit Card Debt: Wipe out outstanding balances and late fees.
- Medical Bills: Erase overwhelming healthcare expenses.
- Personal Loans: Discharge unsecured personal loans, including payday loans.
- Utility Bills: Get relief from unpaid utility balances.
- Judgment Debts: Eliminate certain court judgments (excluding those from fraud or intentional harm).
- Old Lease Obligations: Forgive past-due rent or lease balances for surrendered properties.
- Deficiency Balances: Remove debts from repossessed vehicles or foreclosed properties.
Certain debts, such as student loans, child support, alimony, and recent tax obligations, are typically non-dischargeable. Your attorney can clarify which debts qualify in your specific case.
How Does Chapter 7 Bankruptcy Work in South Dakota?
Filing for Chapter 7 bankruptcy in South Dakota involves a straightforward but structured process designed to help you achieve financial relief. Here is a brief overview of the Chapter 7 bankruptcy process:
- Initial Consultation: Begin by meeting with an experienced South Dakota Chapter 7 bankruptcy lawyer to assess your financial situation. This initial meeting will determine if Chapter 7 is the right option for you.
- Filing the Petition: Once you decide to proceed, your attorney will help you prepare and file a bankruptcy petition with the U.S. Bankruptcy Court. This document includes details about your debts, assets, income, and expenses.
- Automatic Stay: Upon filing, an automatic stay is put into place. This court order halts all collection efforts, including wage garnishments, creditor calls, and foreclosure proceedings.
- Appointing a Trustee: The court assigns a bankruptcy trustee to oversee your case. The trustee reviews your filings and may liquidate non-exempt assets to repay creditors.
- Meeting of Creditors: Approximately 20 to 40 days after filing, you’ll attend a 341 meeting of creditors. Here, the trustee and any creditors can ask questions about your financial situation. Don’t worry—your attorney will guide you every step of the way.
- Debt Discharge: Typically, within three to six months, the court issues a discharge order, eliminating eligible debts and giving you a fresh start.
What Happens Once the Process is Complete?
Once your Chapter 7 bankruptcy is finalized and your debts are discharged, you can start rebuilding your financial life. Here’s what you can expect:
- Debt Relief: The court’s discharge order permanently eliminates qualifying debts, freeing you from collection efforts and financial burdens.
- Improved Financial Stability: Without crushing debt, you’ll have the opportunity to focus on essential expenses and savings.
- Credit Score Recovery: While bankruptcy initially impacts your credit score, responsible financial habits—such as paying bills on time and using secured credit cards—can help you rebuild your credit over time.
- Peace of Mind: No more harassing calls from creditors or threats of foreclosure. You’ll finally have the breathing room to plan your financial future.
- Property Protections: South Dakota’s exemption laws often allow you to keep essential property, such as your home or vehicle, so you can move forward with stability.
Our compassionate attorneys are here to ensure you understand your rights and options as you move forward. You don’t have to face life after bankruptcy alone—605 Bankruptcy is by your side every step of the way.
Contact Our Skilled Chapter 7 Bankruptcy Lawyers
Don’t face bankruptcy on your own. Our dedicated Chapter 7 bankruptcy lawyers have years of experience serving clients here in the great state of South Dakota, and we’re prepared to put that experience to work for you as well. We know this is a stressful time, but we’re here to be your light at the end of the tunnel. Contact us for a free consultation today so we can begin building a successful strategy on your behalf.
