Chapter 7 bankruptcy is designed to help individuals whose expenses outweigh their income. Simply, you are unable to pay your debt. Chapter 7 is the most common bankruptcy filing. A chapter 7 bankruptcy filing can eliminate all of your debt via the “discharge”.
“What debt can I discharge?”
Most debts can be discharged in a bankruptcy. These debts include
- Credit Cards
- Personal Loans
- Medical Bills
- Bank Overdraft Accounts
- Tax debts that meet a certain criteria
- Utility Bills.
As with anything, exceptions and conditions exist to the above listed debts. Our attorneys will explain all of these in your free consultation.
Perhaps the best part of the Chapter 7 filing is the “fresh start”. When you meet with our attorneys you will be able to take a pause, evaluate your financial statue, file a chapter 7 bankruptcy if you qualify and shortly thereafter begin your financial life anew. Your past debts will be forever discharged and you get another chance to begin again. You receive a second financial life.
“Will I lose my possessions?”
Again, exceptions and conditions exist, but it was never the intention of the Federal government to strip the individual of their property in the bankruptcy process. The actual intention is to allow the individual to start their financial life again. This is a life free of crippling debt. A new financial life where the individual can save for the future, start making regular monthly payments again and advance. The ability to support one’s self.
Property that the debtor may keep:
House; Car; Bank balance (up to a certain a amount); Furniture; Clothing; Retirement or Pension funds; College Funds. As stated herein, there are conditions and exceptions to the above. Each item has what is called an “exemption”. An “exemption” is a certain amount of value that is yours only. Most of these exemptions only exist in bankruptcy filings, another example of the protection you receive from a Bankruptcy filing.
Each individual has a $150,000.00 exemption in their primary residence, typically their house.
So, if your house is worth $400,000.00 and the principal balance of your mortgage is $250,000.00 you add your exemption, $150,000.00 and your house is safe. ($400,000.00 house = $250,000.00 mortgage + $150,000.00 exemption)
It may seem funny to mention your clothing and furniture, but you are required to catalogue the same on your bankruptcy petition. So long as your household furniture is not expensive assets (such as antiques) it will be exempt. The same holds true for your clothing.
Your bank account balance can also be exempt. Namely, if the account balance is comprised of your income then the sums deposited directly from your pay for the past ninety (90) days will be 90% exempt.
In addition, if you are not using the “homestead” exemption then you have an additional exemption of $2,500.00.
Finally, the Federal “Wild Card” exemption gives you more than $10,000.00 worth of exempt assets throughout the bankruptcy petition. Again, you may only use this exemption if you have not used the homestead exemption. But consider, you may be able to exempt $10,000.00 worth of cash when you file for bankruptcy. Our attorneys will review your assets during your free consultation and advise you what items are protected. Our experience is your benefit.
QUALIFYING FOR BANKRUPTCY
Under the most recent bankruptcy laws there are numerous conditions that must be met in order to qualify for bankruptcy. There are general income restrictions as well as income versus expenses comparisons. Our attorneys will review your tax returns and pay-stubs together with your monthly bills and tell you whether you qualify for bankruptcy. There is no set limit of income. Each case is different just as each family is different. You may not even know the extent of your expenses until you sit down with our attorneys. We understand debt management. We will guide you through the bankruptcy process.
YOUR DEBT PROBLEMS WILL NOT GO AWAY
Does this sound familiar? You walk out to your mailbox and see a letter from a collector collecting on a credit card you had to stop paying. You don’t open the letter. You know what it says inside. “Pay now” “Lawsuit” “Bank levy”. So, you throw the letter in a pile or in the trash. You think “I’ll pay it as soon as …..?????” But there really isn’t an end to that sentence. You may have lost your job. Or you lost a loved one. Or you are recently divorced? Maybe you simply miscalculated your income and now you can’t pay your bills.
That pile of paper only gets bigger. Those letters in the garbage are hauled away, but the debt stays right there. And the problems get worse.You could get sued. You could wind up sacrificing up to 10% of your paycheck a week! Or lose your bank account! And for what? For a credit card company?
To some, the most valuable of assets is peace of mind. You can have peace of mind, but it isn’t going to happen by itself.Do not sit back and hope for the situation to correct itself. Correct the situation yourself. Our attorneys can help you.