Filing Chapter 7 in Your Younger Years and How It’ll Affect Your Future

As a young person, maintaining balance in all spheres of life can be a challenge, especially financially. You are probably at a phase where you are not formally employed but have real bills to offset every end of the month. As a result, taking debts to fuel your lifestyle becomes your only escape. In the end, you are deep in debt and without a way out. You have tried to negotiate with your creditors for extended payment periods to no avail. Your property is about to be ceased, and the little income that you have can no longer support you. If that sounds like you, then it is time you filed for bankruptcy.


Bankruptcy is a legal process through which individuals, organizations, institutions, and even corporations that are unable to pay their debts can seek relief from their obligations. Though not a good thing, it can be your only solution out of a sticky situation. The common types of bankruptcy cases filed are chapter 7 and chapter 13. The Law Office of Michelle Labayen LLC is here to educate you, and you help you if you wish to file for chapter 7 bankruptcy at an early age.

What is Chapter 7 bankruptcy?

 Also known as a straight bankruptcy, this is a type of bankruptcy where a debtor is given a personal discharge from the debts they have. Any property that the individual owns and is not protected by an exemption is sold, and the proceeds distributed to creditors. However, most chapter 7 cases rarely end with the sale of the debtor’s property. It is important to understand that a chapter 7 bankruptcy can only be filed once in eight years, and you cannot file for it if you’ve had a filing declined in the past six months.

Filing for a chapter 7 bankruptcy

Filing for a chapter 7 bankruptcy in Florida has to be done in a systematic manner. With the help of Michelle Labayen, the process can be made easier for you, but here’s a simple guide on how it is done.

  1. Filing of necessary documents

For you to receive the discharge from your debts, you first have to file the official bankruptcy documents. Some of the common documents that you will be expected to file include the bankruptcy petition, a bankruptcy schedule, and also provide a statement of your financial affairs. The documents should be able to give a clear and actual status of your financial ability. Your forms should indicate both the exempted property and the non-exempted property.

When filing these documents, it is paramount for you to provide absolute truth on all details given. Any false detail can lead to you not being given the debt discharge.

  1. Appointment of a trustee

Once the filing of the petition is complete, the court assigns a trustee that will oversee the bankruptcy case. It is the duty of your bankruptcy trustee to sell any non-exempted property that you may have and pay off creditors.

  • Meeting with creditors

Your trustee then sets up a meeting with your creditors, where you are expected to answer questions regarding your financial status. Creditors have the liberty to ask you questions during the meeting. It is advisable to work with an experienced bankruptcy lawyer in such situations so that you know how to respond to questions asked.

At this point, any secured debts are also dealt with, and you can either pay them by releasing the collateral or by reaffirming the debt (which means that you agree to pay the debt even after filing for the bankruptcy). Michelle Labayen can help you with the reaffirmation of secured debts during your chapter 7 bankruptcy case.

  1. Debt discharge

Once the court establishes that you are not able to pay the debts and that the data you have provided is accurate, you can now receive your chapter 7 debt discharge protection. It is essential to understand that there are some payments or debts that cannot be protected by the chapter 7 bankruptcy discharge and they include; taxes owing, student loans, family support/alimony, and lien.

Five Important things to know when filing for bankruptcy

Filing for chapter 7 bankruptcy is not a decision that you should rush to make. That’s why it is important for you to have an understanding of what the entire process entails and its effects. The following are some important things that you should know about chapter 7 bankruptcy.

  1. Be ready to have your financial life exposed

Chapter 7 bankruptcy is not for those that want to have their financial life kept private. This is because the bankruptcy schedules that you file shows all your assets, debts, incomes, and any other financial transaction affecting you. These records have to be made known to the court and your creditors so that it can be determined whether you are legible for a debt discharge or not.

During the creditors’ meeting, your financial status will be probed before people, and you are required to answer accurately.

  1. It is costly

Although filing for chapter 7 is meant to protect you from debts, you will incur some costs in getting the service. You will be required to pay filing fees in court, and if you work with a lawyer, then you also have to pay for legal assistance. However, it is essential to note that you can appeal for a waiver on the filing fees, and the court will decide whether to grant you the waiver or not based on your financial position.

  1. It is not a ‘one day process.’

Chapter 7 bankruptcy process takes time. There’s a lot that happens from the time that you file for the petition to the time when you receive your debt discharge. You should therefore not expect to get protection from debts immediately you file for chapter 7. If you don’t have the time to conduct the entire process, getting a good bankruptcy lawyer to work with will help a great deal.

  1. Filing the bankruptcy forms is a complicated process

At a young age, you probably haven’t filed for a chapter 7 before, and you may assume that’s it is an easy process. Chapter 7 forms have complex financial questions that have to be answered correctly, and without the proper knowledge, you might fill wrongly and affect your bankruptcy case. That is why it is advisable to work with a professional bankruptcy lawyer in Florida.

  1. Your debt discharge only covers you

Some people assume that by filing for chapter 7, their partners or spouse will also be protected against debt collectors. This is not the case, as the protection is only valid for you. If you had taken a loan with your spouse and you file for bankruptcy, the loan will not be wiped out completely, and the creditors can still collect the debt from your spouse. You should consider this before filing for bankruptcy.

Factors to consider before you file for chapter 7 bankruptcy at a young age

Though age does not determine when to file for bankruptcy, it has an impact on your life. At a young age, you might not have a lot of financial demands. However, you need to understand that the financial choices you make today have a significant impact on your future. Before you file for chapter 7 in Florida, consider the following factors.

  1. Your future goals

Do you wish to buy a home someday, or own a car? If so, then you shouldn’t file for chapter 7 bankruptcy. This is because bankruptcy reduces the chance of you ever getting a mortgage or car loan. It is better that you find a way in which to solve your debt issues so that you can get the mortgage when the time comes for you to own a home.

  1. Can you repay the debt amount within the payment period?

As a young person starting in the employment world, your income may not be the same as the older generation. Debts that exceed your income can be challenging to offset within a reasonable time. If you are fresh from school, that means you also have student loans to pay from your income, which makes your situation even worse. If that’s your situation, then you are justified to file for bankruptcy, otherwise, avoid filing for bankruptcy.

  • The types of loans that you have

It is essential to understand that there are some loans that you cannot get discharged from. Every student indeed wishes to get relief from their student loans, but chapter 7 cannot provide relief against such. Only file for chapter 7 if you have debts that are covered by chapter 7.

The impact of filing for chapter 7 in your younger age

Having decided to file for bankruptcy means that there was no other way for you to resolve your debt issues. Yes, it will provide an escape from some of the debts you may be owing, but it is important to understand that it will also have an impact on your future as a young person. Bankruptcy can have positive and negative effects on your life, as discussed below:

  • Improved life

As a young person, you are bound to make some bad choices that significantly affect your financial life. By the time you realize the mistakes, you cannot bring yourself out of the situation. Filing for chapter 7 gives you a clean slate on which you can rebuild your financial life. Additionally, you will leave a stress-free life as there will be no more calls and letters from debt collectors, and you won’t have to live with the fear of losing your property.

  • You learn to live without incurring more debt

As stated earlier, the chapter 7 bankruptcy in Florida can only be filed after eight years. Knowing that there will be no way out for you from your debts within that period will prevent you from incurring more debts. With time this improves your ability to make better financial decisions. The compulsory credit management course that’s required for your discharge will also help you learn better ways through which you can manage your finances and debts in the future.

  • You ignore the real issue

Filing for bankruptcy at an early age helps you to escape the financial mess that you may have put yourself into because of bad decisions. As a result, you may not address the real issue, which is your financial behavior. There is a higher probability that you may repeat the same mistake once you are old since you did not face the real consequences of bad financial decisions at an early age.

  • Hindrance to your goals

Bankruptcy makes it difficult to get mortgages and loans from financial institutions. It can also make it difficult for you to get a job as most employers view you as a person that’s not able to manage their resources and cannot be trusted with company resources.

  • You may lose property

In some rare occasions, you can lose your property if you decide to file for a chapter 7. As a young person struggling to get a job and grow your wealth, this can be quite detrimental as it pulls you back.

  • Negative credit score

Once you file for a chapter 7, your bankruptcy is reported to some credit bureaus. Unluckily, this record stays for about ten years before it is removed. Even if your financial status improves after filing for bankruptcy, it may be difficult to get a credit card or loan for a long time. This may result in missed investment opportunities that you will live to regret.


Your financial life is a crucial aspect that you should handle properly. If you find yourself in a financial crisis that can only be resolved by filing for bankruptcy, go for it but understand the impact that it will have. As a young person with a promising future, when filing for bankruptcy, ensure that you work with the best lawyers in your region, equip yourself with knowledge on chapter 7 and create a financial plan that will guide you after you have received your debt discharge. Remember, a financial crisis is not the end of your life as a young person, you have a lot to accomplish, and chapter 7 bankruptcy can help you achieve that. 

Call Michelle now at (973) 622-1584, or contact her online.

Michelle Labayen

Michelle Labayen

Michelle Labayen has been practicing Consumer and Bankruptcy law for more than 16 years. She is a member of the National Association of Consumer Bankruptcy Attorneys (NACBA), and the National Association of Consumer Attorneys ( NACA).

In addition, she is a Max Gardner Bootcamp graduate. Extensive experience has given Michelle a thorough understanding of bankruptcy, including:

  • Chapter 7
  • Chapter 13
  • Adversary Proceedings
  • Litigation under the Fair Credit Reporting Act
  • Litigation under the Fair Debt Collection Practice Act

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Contact Michelle, today, and get on the path to financial freedom.

The Law Office of Michelle Labayen, LLC Can Help With The Bankruptcy Process

Anyone can qualify to file for bankruptcy. There isn’t an exact amount of debt or financial difficulty required. You don’t have to show insolvency or meet a certain standard.

You should always speak with a lawyer before beginning the bankruptcy process to ensure it’s the best option for you. Michelle Labayen is a knowledgeable and experienced bankruptcy attorney with offices in New York, NY, and Newark, NJ. Florida licensed attorney Drew Gaddis is counsel and would be representing all clients in Florida.

Miami Bankruptcy Office

100 SE 2nd St Suite 2000 #A
Miami Tower
Miami, FL 33131
Phone: (786) 209-2327