What Happens If I Don't Pay My Chapter 7 Overages?
A Chapter 7 bankruptcy filing with no assets can discharge many personal debts within a few months. A Chapter 7 bankruptcy with assets in excess of legal exemptions leads to overages that must be paid off to the court. A debtor who cannot pay back his Chapter 7 overages can face additional legal and financial problems.
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Surrender and Buy-Back
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Chapter 7 overages are assessed on personal property in excess of personal exemptions under Chapter 7 bankruptcy laws. Three options available at the time of filing a Chapter 7 bankruptcy are to surrender all excess property, to buy back the property or to surrender some and to buy back some. Excessive overages that cannot be bought back within the statutory period must be surrendered.
Extend Your Buy-Back Period
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The court should be notified as soon as any repayment problems arise. An amendment to the statement of intention to repay the overages may be made as long as the case remains open. A bankruptcy attorney or free legal aid service can file a motion for an extension of time, as long as no statutory limitations exist. The court will approve or deny the motion based on Chapter 7 bankruptcy law.
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Reopen Bankruptcy Case
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Chapter 7 overages must be paid back in accordance with the payment schedule or within the designated time frame, or there can be serious legal ramifications. The court can force the bankruptcy petitioner to forfeit outstanding property or find him in contempt of court. The court can assess additional fines and add to the financial burden. The court can also reverse the Chapter 7 discharge and thereby remove any protections of the bankruptcy court.
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