Chapter 7 Bankruptcy Basics

Chapter 7 Bankruptcy Basics

If you are facing overwhelming debt, you may be weighing your options to see what choices are available to you. You will most likely want to take the path of least resistance that allows you to get a fresh financial start. If so, one of the options worth considering is a chapter 7 bankruptcy filing. By comparing the options available in chapter 7 bankruptcy, you can decide whether or this is the best choice for your financial improvement.

When to File for Chapter 7 Bankruptcy

Chapter 7 bankruptcy can be filed when you know that your debts far outweigh your ability to repay them. Repeated calls from creditors, late notices, over the limit fees, and other related signs indicate that you will benefit from debt relief. Debt relief can be had easily when you choose to file for bankruptcy and start over from scratch. This gives you a new beginning and a chance to put old debts behind you so you can start anew.

Who Qualifies for Chapter 7 Bankruptcy?

Chapter 7 bankruptcy is definitely the most common type of bankruptcy to file. However, not everyone qualifies for it. There is a means test provided to see if the applicant’s income falls below the median amount. If it does then they will be eligible to file for chapter 7 bankruptcy. However if their income is above the guidelines, it is best to consider alternatives such as chapter 13 bankruptcy. Chapter 13 will be the most viable option, which allows you to pay your debts over time with the disposable income available each month.

Is Your Property Protected?

Many people may be wondering if you have to relinquish property in order to file for chapter 7 bankruptcy. Some property may be sold to repay creditors, but exempt property will be fully protected during the bankruptcy process. The types of property that are exempt include your place of residence, trade or vocational books, unemployment benefits, life insurance contracts that have not matured, and other related benefits.

Chapter 7 bankruptcy can provide the relief you need when facing overwhelming debt. Take the time to consult with a bankruptcy attorney to figure out whether or not this option is best for you. At the law office of David S. Kohm, you will benefit from the expertise and knowledge of a chapter 7 bankruptcy attorney.

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