Being buried in debt can cause a lot of stress. What’s even worse is when you’re no longer capable of paying it. Don’t worry though because it’s not the end of the world. You can always look into filing a Chapter 7 bankruptcy. As long as you’re eligible, this can be your key to getting a fresh start.
How Does it Work?
When you’re approved for Chapter 7 bankruptcy, collection agencies will no longer be able to chase after you. It’s a way to discharge most of your debt, giving you a much-needed relief from creditors, some of whom might have been starting to harass you just to make you pay. In favorable cases, you will also be able to keep some of your possessions such as your home or car.
Being one of the most common forms of bankruptcy in the country, Chapter 7 is used by both individuals and businesses. It requires you to file documents before a bankruptcy court to prove that you don’t have the capacity to settle or reorganize your debt.
When you’re given the go signal for a liquidation bankruptcy, you and your creditor will be able to discuss a repayment plan. Your debt may also be canceled under particular circumstances. In most cases, a Chapter 7 bankruptcy proceedings can last for six months and could involve complicated paperwork that only a bankruptcy attorney can fully understand and work on.
What Makes You Ineligible?
There are factors that can hinder you from getting a Chapter 7 bankruptcy. One of them is a high income, which can be determined through a “means test.” It will be measured through your wages, tips, bonuses, commissions, interests, real property income, and other sources of income.
Another factor is your ability to repay the debt. If you have money left after all your expenses like rent and food, you will likely be required to seek a Chapter 13 repayment plan instead of a Chapter 7 bankruptcy. A previous record showing that you’ve already filed for a Chapter 7 within the last eight years can also ruin your chances of getting approved again.
A Chapter 7 bankruptcy can be the answer to your problem, so if you want to look into this option, you may want to look for a reliable bankruptcy attorney to help you out.
What is Chapter 7 Bankruptcy?, wisegeek.net
Who Can File for Chapter 7 Bankruptcy?, bankruptcy.findlaw.com
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