Chapter 7 total bankruptcy
Chapter 7 works best for people who have a lot of credit card and medical debt. Bankruptcy is designed to completely eliminate unsecured debts like credit card and medical bills. Typically, it works quickly, meaning you don’t have to wait years for a fresh start. Bill collectors usually don’t just go away. In fact, as your debt becomes older, they sometimes get more aggressive in their collection efforts. Once you file Chapter 7, collectors are legally prohibited from contacting you. They must deal with the bankruptcy court instead. Finally, those calls and letters will stop! Chapter 7 property protections vary according to state laws, but, generally speaking, Chapter 7 offers less protection for your property than Chapter 13 bankruptcy. However, Chapter 7 exemptions may allow you to keep your home, car and other valuable items like work tools, furniture, clothes, appliances, photos and books. In order to qualify for Chapter 7 bankruptcy, you must pass the means test. A local bankruptcy lawyer can help you with this test, which looks at your income and debts to determine true need. It’s true that bankruptcy affects your credit score. But if you already have a low credit score, that may not matter much. It usually stays on your report for 7-10 years, but after you discharge your debt, you can work to improve your score during that time. It is certainly possible to get auto or home loans during that 7-10 year period. Laws passed in 2005 set eligibility requirements for potential filers. In order to file, you must meet certain criteria, including passing the Chapter 7 means test. After you pass the test, you will also need to complete a credit counseling course. The means test isn’t like the exams you saw in school. Learn how this measure of your debts, income and assets affects your ability to file. The rules for the means test vary by state, and we provide some quick tools to give you a better idea if Chapter 7 may be able to help you. Although Chapter 7 is typically one of the fastest acting forms of debt relief, there are still many steps and stages, each requiring you to complete processes, filings or meetings. Learn more about what happens, and when, during a bankruptcy case. Every situation is unique. To get the facts about how filing Chapter 7 could impact your life, talk to a Chapter 7 attorney today. Filing bankruptcy, whether it’s Chapter 7 or Chapter 13, is not a decision that should be undertaken lightly. However, if you’re in a difficult financial situation that just keeps getting worse, filing bankruptcy may be your opportunity to seek broad protection against creditors, regain control of your financial life and rebuild your credit after bankruptcy. In the event that you do not qualify for Chapter 7 bankruptcy, don’t despair — filing Chapter 13 bankruptcy may still be an option for you. Don’t live another day in financial torment. Take action and control today by talking with one of our sponsoring bankruptcy lawyers about how filing bankruptcy may be able to help with your current financial problems. Although Chapter 7 bankruptcy may help eliminate unsecured debts, secured debts are generally not separated from the assets that secure them. That means that if you want your car loan discharged, you’ll have to give back the car. However, if you want to keep your car (or another asset that serves as security for a debt) you may be able to negotiate a reaffirmation agreement with your creditors in Chapter 7 bankruptcy. By reaffirming a debt, you agree to continue making payments in exchange for the right to keep your property. You can discuss this option with your lawyer. Exemptions protect certain property from liquidation in bankruptcy. The specifics vary from state to state. Exemptions typically include the primary residence, tools, work equipment, vehicle, certain items of personal property and numerous other categories of property. Your court-appointed bankruptcy trustee can liquidate your non-exempt assets to pay your creditors. However, a trustee will likely only liquidate in most cases if he or she can obtain enough money from a sale to make a significant payment to your creditors. Talk to one of our sponsoring bankruptcy lawyers today about your state’s exemptions. If you decide to file Chapter 7 bankruptcy, you will first have to complete your credit counseling session and then provide all of the necessary information to your Chapter 7 bankruptcy lawyer, who will review your situation and prepare a bankruptcy petition. You will have to list personal information, including all of your income, assets, expenses and debts on your bankruptcy petition and any related forms and schedules. You will also have to include any applicable exemptions to which you’re entitled. How important is it to disclose all of your debts when seeking to file for Chapter 7 bankruptcy? Whether failing to list certain debts is an honest mistake or a deliberate action, bankruptcy fraud is a serious offense that can result in prosecution. Bankruptcy lawyers can help prevent bankruptcy fraud. Next, your bankruptcy attorney files the petition in local bankruptcy court, which will appoint a bankruptcy trustee to your case. After filing bankruptcy your bankruptcy petition with the court, an “Automatic Stay” is entered in most cases to prevent creditors from taking any further action against you on the debts included in your filing outside of bankruptcy court. This may mean an end to the harassing creditor calls, repossessions, or wage garnishments during your case.