Feeling like you are drowning in debt is one that you might not be able to overcome. For most consumers, there are two options for filing bankruptcy. These are Chapter 7 and Chapter 13, and each has its own guidelines.
The first question is whether or not your income is sufficiently low enough to qualify for Chapter 7. If your income is over the state median, you have to fill out a means test to determine if you qualify for this type of bankruptcy. The time since any previous bankruptcy case also matters.
When you file Chapter 7, you have to determine what property is exempt and what is non-exempt. Any property that is exempt from the filing is kept. The court only takes valuables that are non-exempt and liquidates them to pay your creditors. Most people have very little that the court is interested in taking if they qualify for a Chapter 7 bankruptcy.
Unlike a Chapter 13 bankruptcy, you will not make payments to the trustee toward your debts if you file Chapter 7. This provides much-faster financial relief for filers who have a tight budget.
Once the assets go through liquidation, the court divides that proceeds between creditors depending on the current guidelines. Creditors can’t come back after the case to try to recover any more money. Instead, they must write off any balance that remains after the court discharges the case.
Is it time to file for financial relief from your debts? At experienced bankruptcy attorney can help you understand your bankruptcy options and how your decisions will affect your financial future.