In the United States, Bankruptcy chapter 7 is a strong tool that permits you to completely erase various debts such as credit card debt, car loans, payday loans as well as medical debt. According to the experts, 39 million Americans have already filed for Bankruptcy, whereas many people think it is common.
A good question which you should ask yourself is if you are thinking about chapter 7 bankruptcy, is this best for you or not? In this article, we will provide you with all the basic information to file for Bankruptcy which will help you.
First, you should understand what chapter 7 is and how it works;
What is Chapter 7?
In the chapter 7 bankruptcy, you will fill the form, which is all about your detailed information about what you earn, spend, pay, or what belongs to the bankruptcy proceedings. Whereas, if you are working that, you will also need to provide them with all the recent tax returns as well as payslips.
Your forms and documentation will be reviewed by a trustee, who is an official appointed to your case. You’ll meet with them for a brief meeting during which they’ll ask you some basic questions about the information on your paperwork. After some months, you will receive a notice from the court that confirms your bankruptcy discharge.
Is It Possible To Keep The Property If You File For Chapter 7 Bankruptcy?
People are easily able to maintain their property within 95 percent of Chapter 7 bankruptcy proceedings. However, there are some principles in the bankruptcy code, which are known as “exemptions” that will help to keep some types of property, including cash, clothes, furniture, cars, and other items, up to a specified dollar of value; known as “exemption limits.”
However, your state will determine which exemptions you can use to protect your property. Therefore, many states provide “wildcard exemptions,” which allow you to keep any property if its value is less than a specific amount. The wildcard ceiling for the 19 states that provide “federal bankruptcy exemptions” is just over $10,000, which means you can keep the property worth less than $10,000.
Which People Are Eligible To File For Bankruptcy?
It is important to distinguish between who can permit the file and who should file? Most people who earn less than the state’s median income for their household size are eligible to file. This is due to the fact that they satisfy the “means test,” as defined by bankruptcy rules. The means test helps to consider your monthly income over the previous six months.
At the end of the article, we will suggest that it depends upon your financial condition, and other debt-relief choices will determine whether or not you should apply for Chapter 7 bankruptcy. It’s also important to think about the filing date. To understand more about your options, enroll in a credit counseling course or request a free consultation with a bankruptcy attorney.