Is a Chapter 7 bankruptcy right for me?
Making the decision to file for bankruptcy is never easy. But filing for bankruptcy is a solution that provides relief to many financial problems. Chapter 7 bankruptcy is the bankruptcy option with the quickest relief, with the average case resolving within about three months. A Chapter 7 bankruptcy is in many ways easier because most debts are completely discharged including credit cards, medical bills, balances on repossessions, short sales, signature loans, deed in lieu, and foreclosures, and it does not require an alternative repayment plan for the debtor to maintain. Instead, nonexempt property and assets may be liquidated and used to pay creditors. However, many individual bankruptcy cases are closed without the trustee selling any assets belonging to the debtor. You cannot use a Chapter 7 bankruptcy to dissolve taxes, student loans, child support, alimony, and court fees, fines, and penalties. Chapter 7 bankruptcy is also the most common form of bankruptcy filed for both individuals and businesses. Every client’s circumstances are unique, so you should speak with a knowledgeable bankruptcy attorney to help you determine if Chapter 7 bankruptcy is right for you.
Will I be able to keep my house and car if I file Chapter 7 bankruptcy?
A major benefit to filing Chapter 7 bankruptcies is you can keep your home and vehicle. To keep your car, you will be required to sign a reaffirmation agreement, which is an agreement to continue to pay under the same or similar terms of your original vehicle purchase agreement. For a debtor to keep their home, they must be current in their mortgage payments, or they must be able to reach a forbearance or modified agreement with their mortgage company. If the debtor is not current on their mortgage and is not able to reach a forbearance or modified agreement with their mortgage company, then filing Chapter 7 bankruptcy will not stop the mortgage company from being able to foreclose on the home.
Who is eligible to file Chapter 7 bankruptcy?
The best way to determine if you are eligible to file for a Chapter 7 bankruptcy is to work with an experienced bankruptcy attorney who will review your individual conditions and needs and help you decide which form of bankruptcy is right for you. Your attorney will gather information about your monthly income and living expenses, and if you have little or no disposable income left after paying your living expenses each month then you will likely qualify for Chapter 7 bankruptcy. If you have previously been granted a Chapter 7 bankruptcy within the last eight years, then you cannot file for Chapter 7 again, but you may qualify for Chapter 13 bankruptcy four years from the date of your Chapter 7 bankruptcy.