Chapter 7 Bankruptcy Filing: What You Should Know
Posted on: 18 March 2020
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Many people are able to get a fresh financial start by filing for Chapter 7 bankruptcy when they are dealing with a mountain load of debt. However, if this is something that you are considering, it is important to understand that this is a decision that should not be taken lightly, as it can impact your creditworthiness in the future. For this reason, you should consult with a bankruptcy attorney before making a final decision and discover what to expect from the filing process. Keep reading to learn a few things you should be aware of regarding Chapter 7 bankruptcy filing.
Certain Eligibility Requirements Must Be Met
Though Chapter 7 bankruptcy is a popular form of bankruptcy to resolve debt, everyone that wishes to use it does not qualify for it. There are certain eligibility requirements that must be met in order to file Chapter 7 bankruptcy. For instance, your income will be examined to determine if you make less or more than the average based on the size of your household. In the event that you make more, a means test must be passed that will determine your eligibility.
Certain Debts Are Only Eligible for Discharge
Chapter 7 bankruptcy is designed to eliminate unsecured debts, which means it is great for individuals who have a financial burden with debts like medical bills, credit cards, personal loans, legal fees, and the like. Certain debts are ineligible to be forgiven through this type of bankruptcy like student loans, car loans, mortgages, child support, alimony, and some tax debt.
Property Exemptions Exist
One misconception that individuals have when filing bankruptcy is that all of their assets will be lost. However, a property exemption is in place to ensure this does not happen. To find out which property exemptions you are eligible for and what steps must be taken to ensure your assets remain safe, you will need to speak to a bankruptcy attorney, as this information will vary from one person to the next.
Filing for Chapter 7 Bankruptcy Is a Process
When it comes to filing for bankruptcy, you can expect a great deal of paperwork. However, to ensure that nothing is missed and the court has everything it needs, an attorney can help. As soon as the petition is submitted to the court, you are typically required to attend a counseling session before discharge orders can be obtained. The details of this session may vary, but the specifics will be given by your attorney.
For more information on the process of filing for Chapter 7 bankruptcy, consult with a local bankruptcy lawyer, such as James S Price Bankruptcy Attorney.