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Is Filing Chapter 7 The Right Thing?

Filing Chapter 7 happens to millions of people each year. While there are more and more cases that are being turned away due to the new bankruptcy laws in place, many are still finding benefits in filing these discharges. TO learn if this is the right choice for you, there are several things that you must do first.

1. Determine if you have done everything in your power to lower your debt on your own and come up from under it.

2. Determine if you qualify by talking with your attorney about if you qualify for Chapter 7 or Chapter 13. Usually taking a means test with him or her will determine this.

3. Finally, educate yourself about what the process entails.

There are some very important things you should know about filing Chapter 7, then, before making your decision. For example, you should know that the best person or couple to file this type of filing is that of someone that has little or no assets. Because your creditors can stake claim on those goods, you will need to relinquish anything that is of value.

Each state has provisions in place to determine what you can and can’t keep when filing. For some, you will be able to keep the equity that you have in your home. In others, you will have to turn over your household goods that are in excess of a certain dollar amount. In some states, you can keep your wedding rings.

When it comes to your home and your car, these too change depending on the location that you live in. IN some areas, you will be able to keep them if you are current on your payments and your lenders agree to continue with the payment plan. In other cases, you can lose your home or cars to your bankruptcy filing. The funds from any sale of assets will go towards paying off the money you owe in debt to your creditors. Even if it is just a little amount, it will be split fairly.

The process of filing Chapter 7 can take any place from three months up to five or six months before your debts are finally discharged. During this time, you can’t apply for new credit or spend on your old credit. In addition, there are restrictions on how often you can file Chapter 7.

Is it right for you? You should talk to your attorney to learn more about whether this is the right choice for your financial future or not.