If you are considering filing for bankruptcy, you’re not alone. In 2017, over 740,000 petitions for bankruptcy were filed for debts, many of which were consumer-based. Chapter 7 bankruptcy is the most common type of bankruptcy filed for and it offers the discharge of most forms of debt. That said, there are stipulations that you must meet in order to qualify for this type of bankruptcy. While Chapter 7 bankruptcy attorneys can provide in-depth information regarding this process, the major qualifiers are income limitations and the ability to exchange nonexempt property.
The Advantages of Filing Chapter 7
Even though this option requires a debtor to give up some nonexempt items, the main goal is to create a fresh start whereby the debtor can begin managing their money and saving without suffocating under insurmountable amounts of debt. That said, there are limitations and certain debts can’t be cleared. Student loans, for example, are often unable to be cleared unless otherwise ruled by a court. Child support, debts acquired fraudulently, and property liens, are among the debts that can also remain. To navigate this field better, hiring a bankruptcy lawyer can afford you the option to achieve the best outcome while giving you the tools needed to fully understand the process.
Keeping Future Income
Anything acquired after filing for a Chapter 7 bankruptcy will not be included in the bankruptcy estate; however, there are some exceptions regarding certain property types. While this isn’t an issue for many who file, if you’re concerned, bankruptcy attorneys will be able to clarify your situation. That said, once bankruptcy has been awarded, all future income, assets, and properties, will be yours. There is are exceptions, tax refunds owed to you before you file and money inherited within 6 months of filing your bankruptcy.
No Debt Limitations or Repayment Plans
Chapter 13 bankruptcy has limitations on the amount of debt that can be cleared; however, Chapter 7 does not. Likewise, there are no repayment plans as the debtor is free from (most) debt. Chapter 13, on the other hand, can require a debtor to pay specific amounts under a courtordered repayment plan. The payment would be based on your ability to pay debts you need to pay, such as mortgages, car loans and taxes. Debts that you would have to pay after filing a Chapter 7.
Overall, the amount of time it takes for debts to be discharged can be as little as three months. After this, the property forfeited will be distributed to creditors and the case will be closed.
If you are struggling with debt and want to be able to start over, Chapter 7 bankruptcy may be for you. Speak with bankruptcy attorneys for more information, and to see if this form of bankruptcy would be best for your situation. Contact the Office of Larry Karandreas today for a free consultation.