If you want to file for bankruptcy, it's essential you work with a bankruptcy attorney. Apart from advising you, an attorney will help you navigate the legal process of filing for bankruptcy. Here are some frequently asked questions about Chapter 7 bankruptcy.
What Are the Alternatives to Chapter 7 Bankruptcy?
Before filing for a Chapter 7 bankruptcy, you must familiarize yourself with the available alternatives. This will help you make an informed decision. The main alternatives to Chapter 7 bankruptcy include Chapter 11 and Chapter 13. Debtors who are involved in business may opt for Chapter 11 bankruptcy to avoid liquidation. Under this chapter, you'll get a reduction or extension of your debts.
Chapter 13 also provides an extension of your debts. Under this chapter, your bankruptcy attorney can help you negotiate for a 3–5-year repayment plan. You may be required to pay part or all of your debt during this duration. After completing the repayment plan, your debt will be discharged.
What Are the Requirements for Filing Chapter 7 Bankruptcy?
One of the requirements for filing Chapter 7 bankruptcy is you need to go for a bankruptcy mean test. This test is done to determine whether your income is above the state's median income. You'll be required to go through this test if a significant amount of your debt is from consumer purchases.
Another vital requirement for filing for bankruptcy is completing legal forms. This includes a petition, statement of your financial affairs, and schedules. Your bankruptcy law firm will help you obtain and fill the appropriate forms. It's worth noting that you have to pay filing costs and attorney fees.
You're also required to get credit counseling before filing for bankruptcy. You should go for these sessions 180 days before your bankruptcy is discharged. Remember that you should get this counseling from a government-approved agency.
What Are the Stages for Filing Chapter 7 Bankruptcy?
When filing for bankruptcy, you should present a petition. You need to provide information regarding your income, assets, and debts. At this point, you'll get an automatic stay. This means your creditors cannot pursue you for your debts.
Another important part of filing Chapter 7 bankruptcy is meeting your creditors in the company of your bankruptcy attorney. A trustee will handle the process and confirm whether you qualify for Chapter 7. The trustee will inform you about the assets that are non-exempt. This includes the equity in your house, car, and jewelry. After attending credit counseling, and a few months after you file the petition, your eligible debts will be forgiven.
For more information about working with a Chapter 7 bankruptcy attorney, contact a local law firm.
Share31 March 2021
If your mountain of debt has grown so tremendous that you can't imagine a way out, then you need to contact a bankruptcy attorney. Even though filing bankruptcy can seem like cheating, it is sometimes the only option when you have consumer or medical debt that is consuming your paycheck and then being left unpaid. An attorney can take a look at your finances and recommend a pathway out of debt utilizing one of the several types of bankruptcy available. Learning more about this process can make it seem more approachable. Dig into the articles on this website to get started with that learning.
