A large number of unsecured commitments, or debts without collateral, including credit card debt, personal loans, and medical expenses, are forgiven in Chapter 7 bankruptcy. But several types of debt, such as unpaid taxes, court orders, divorce, child support, and college loans, are often prohibited. Your credit records will show Chapter 7 bankruptcy negatively for ten years. You might discover it more challenging to get credit during this time. However, in the months after filing, you will probably start to see a boost in your credit ratings. If you want to file a Chapter 7 bankruptcy, click here to learn more.
What is Chapter 7 bankruptcy and how to file it
Chapter 7 bankruptcy is only available to those who:
- You must qualify for the means test, which evaluates your income, assets, and expenditures.
- Any Chapter 7 or Chapter 13 bankruptcy successfully resolved during the preceding eight or six years is ineligible.
- Cannot possess a bankruptcy petition (Chapter 7 or 13) during the prior 180 days that was dismissed because of your absence in court, failure to comply with court orders, or the voluntary rejection of your own filing due to creditors pursuing court relief to reclaim property they had filed a lien on.
The process is likely to be completed in six months, but you have to carry out a number of actions which include the following:
Before bankruptcy, you must get pre-filing credit counseling from a licensed nonprofit organization.
Find an attorney
When beginning all the paperwork necessary to file Chapter 7, get the help of a professional bankruptcy lawyer. Even though it can be difficult to come up with money to pay for legal representation while seeking debt relief, this scenario cannot be handled alone. For comprehensive guidance and assistance with the Chapter 7 filing process, consider reaching out to Weston Legal. Insufficient or incorrectly filled evidence could lead your case to be dismissed or result in some debts not being forgiven.
Trustee takes control
A court-appointed bankruptcy administrator will take control of the process if your petition has been submitted.
Meeting of lenders
The trustee will schedule a meeting with your creditors, attorney, and you. The trustee and your creditors will query you on your bankruptcy papers and your financial state.
Property that is not exempted is managed by the trustee, who decides if it is worthwhile to sell so that creditors can receive the revenues. Jewellery is a typical example of non-exempt property, as is the equity in your home or car if it surpasses the exemption limit in your state. However, “no asset” Chapter 7 cases—where there is no nonexempt property to liquidate—comprise the bulk of individual Chapter 7 cases.