Bankruptcy Questions Answered

Chapter 7 is often times called a liquidation. It is basically the quickest form of bankruptcy that is available to married couples, corporations, and partnerships. Many have questions about Chapter 7. In this article we will be covering questions about Chapter 7 bankruptcy FAQ’s that you may encounter prior to filing for your bankruptcy in court.

Who is eligible for Chapter 7 bankruptcy?

Starting on October 17, 2005 you must qualify for Chapter 7 bankruptcy through what they call a means test. It is now up to the Internal Revenue Service who can or cannot file for bankruptcy. In this process your income and expenses will be examined at way to compare your standards by the IRS.

In the event that you earn much less than the median for families of your size in your state, you can automatically file for Chapter 7. If your income in the last six months is greater than the mean, can you can afford at least $6,000 over five years and a $100 a month forget that you’re not allowed to file for Chapter 7, but you have to file for Chapter 13.

Under the new law you must receive approved credit counseling and budget analysis at your own expense prior to filing for bankruptcy. Counseling can be used to address most of the means tests all the regulations require prior to filing. There are also tests on the Internet that you can use to assess your means prior to filing for Chapter 7.

How I file for Chapter 7?

The first step in filing Chapter 7 starts for the filing a petition. You must complete all the bankruptcy forms and list all your creditors in the list and the amount of money you owe each one of them. In addition, you must list of current income, as well as a list of all your property in a detailed list of all your living expenses.

Immediately after you file for bankruptcy your creditors are prevented from trying to collect their debt. This is called an automatic stay. The stay is created to give you a small break from litigation while the court can figure out what debts might be exempt.

After you file, it is up to the creditors to show the bankruptcy judge that there is cause for the creditor to be allowed to continue with their collection action.

What debts can be discharged in Chapter 7?

The types of debts they can be dis chargeable in a Chapter 7 bankruptcy can be credit card debt, repossession deficiencies, accident claims, judgments, business debts, leases, medical claims, or personal loans. Some of the other items that are not dis chargeable through Chapter 7 bankruptcy our recent taxes owed, student loans, child and family support, criminal fines or any debts that were from a prior bankruptcy where debtor was denied discharge.

In closing, before you decide whether bankruptcy is the right choice for you, make sure you take your time and assess all the financial impacts such a decision will have in to your future.