Many people who think they know what bankruptcy is fail to realize that there are various forms of it. For instance, could you answer the question: What is Chapter Seven bankruptcy? How about Chapter 13? Knowing your options in bankruptcy is pivotal to climbing out of your financial hole.
The following is some information about Chapter Seven, specifically.
What Is Chapter Seven Bankruptcy?
Chapter Seven, like all forms of bankruptcy, is designed to give consumers a fresh financial start after they have dug themselves in a hole with various types of debt. These measures could even hold of home foreclosure. Chapter Seven is designed for those who own very few assets and have little money.
Chapter Seven bankruptcy helps the consumer get out of re-paying many of their unsecured debts. For instance, if you had run up $5,000 in credit card debt and then filed for this form of bankruptcy, that debt would generally be forgiven. Needless to say, this is a lifesaver for many consumers that have become buried in debt.
Can Anyone File For Chapter Seven Bankruptcy?
No. To qualify for Chapter Seven bankruptcy protection, you need to prove to the bankruptcy court that you do not have the money or assets to pay off your debts. This was built into our country’s bankruptcy code in 2005 to stop people from abusing Chapter Seven bankruptcy simply to get out of paying their debts.
Anyone filing for Chapter Seven bankruptcy will have to take a means test, which gauges whether or not you have the money or assets to pay off your debts. If you have significant wealth, it is likely that a bankruptcy trustee will make you file for Chapter 13 bankruptcy, where debtors are put on a payment plan in order to pay off their debts.
Will Bankruptcy Officials Take My Stuff?
Most lawyers will point out that in Chapter Seven bankruptcy, you will usually be able to keep your home, car, and other crucial belongings, especially if you are current on your payments and you do not have significant equity in your home. Other entities, like retirement accounts, are also exempt from being seized by the bankruptcy court.
However, a bankruptcy trustee will comb through all of your assets and try to squeeze out some money and use it to pay creditors. However, this type of bankruptcy is designed to help you erase debt and keep your belongings.
Is Chapter Seven Bankruptcy For You?
If so, you will need an attorney that knows this area of the law. To find one, simply log on to TalkLocal and put out a call for such a professional. In a mere 90 seconds, we will have multiple lawyers calling you, happy to assist.
