What is Chapter 7 Bankruptcy?
When you can’t pay your debts or owe a large sum of money to a creditor or loan officer Chapter 7 could be the answer to your prayers. Beginning with property liquidation is the first step to understanding how this process works. Portions of your property may be sold to lessen the amount of debt you are facing. Although Chapter 7 eliminates credit card debt, medical expenses and unsecured loan debts, it does not cover tax debt or spousal backing after a divorce resolution. We are here to keep you informed to what is the right bankruptcy plan for your specific debt settlement needs.
Am I Eligible?
Deciding if Bankruptcy is the right financial choice for you depends on a variety of criteria, and making the right choice can be a lengthy process. At Giordano Spanier & Heckele Law we are prepared to help clients choose the right course of action to rectify their financial troubles. We want to keep you informed every step of the way as you make the decision to file bankruptcy. Finding out if you are able to apply for Chapter 7 bankruptcy is the first step.
Eligibility relies on several criteria including your level of income, previously filing for bankruptcy or cheating creditors can hinder your changes of applying for Chapter 7 bankruptcy.
Your level of income is a deciding factor for most jurisdictions to whether or not Chapter 7 is the right choice for you. If your total income over a period of six months is less than or equal to the amount of debt you face you are eligible for Chapter 7 bankruptcy. Most often, those who apply for Chapter 7 do not have a disposable income. Creditors will collect your debts based on property in your name. Vehicles, household items and in extreme cases your home can be repossessed by creditors. If your disposable income is higher than incurred debt you are not eligible.
Depending on the amount of debt you have incurred is very important to which type of bankruptcy is the right financial choice for you. There are two different kinds of debt, unsecured and secured debt. A creditor cannot repossess property or a particular item if unsecured debt goes unpaid, which makes bankruptcy the right course of action if you face unsecured debt. Examples of unsecured debt include unpaid credit card bills, medical debt or home foreclosure fines.
Do you face unsecured or secured debt? Are you attempting to pay off medical bills or do you face income tax debt? The type of debt you face will dictate your choice in filing Chapter 7 or Chapter 13 bankruptcy. If your debt is drowning you and your family, and you do not think you are going to acquire a significant amount of debt in the future filing for Chapter 7 is your best bet to reclaim your financial freedom. You must wait eight years before filing for bankruptcy again. We suggest looking into your immediate financial future for other instances, which might accumulate debt.
How do I file for Chapter 7?
There are many questions to answer before filing for bankruptcy. We are here to answer those questions for you, and many more. We understand how nerve-racking bankruptcy can be, but we are here to help you with the stress of paperwork and making a life changing decision for you and your family. There is a lot of necessary paperwork to initiate Chapter 7 including a petition, schedule of assets, liabilities, and current state of income, expenses and all debt to be included.
Bankruptcy should be your last resort. Do not file for bankruptcy if there is even a chance you can pay off unsecured debt. The next step is to find out if you are eligible to file. Regarding your income, family size and state laws will be three deciding factors to whether or not Chapter 7 is the right choice for you. You will have to fill out a federal form, “The Means Test”, which measures your level of income over a period of six months. This is then compared to the amount of unsecured debt you have.
The most important step is to consult the attorneys at Giordano Spanier & Heckele Law to determine whether or not Chapter 7 is the best choice for you and your family’s financial safety. We will guide you through the entire process to let you know what the pros and cons are, and what your next steps should be. There is a required credit counseling process to measure your level of credit, credit score and past financial records to further evaluate if Chapter 7 is the right choice for you.