Filing for bankruptcy is an upsetting and confusing time for most people. Deciding which type of bankruptcy to file for and doing so correctly can be very challenging, especially for people with no experience in bankruptcy law. Due to the intricacies and difficulties involved in filing for bankruptcy, especially Chapter 7, it is beneficial to hire a lawyer for help. A Chapter 7 bankruptcy lawyer will help debtors prove that they meet the requirements of this type of bankruptcy and increase the probability of the filings being successful.
Who is Eligible for Chapter 7 Bankruptcy?
In order to be eligible to file for Chapter 7 bankruptcy, debtors must prove that they are unable to repay their extensive debt. Anyone who files for Chapter 7 must be earning a salary that leaves them with very little disposable income and no money left over for repaying debt. People that have a moderate amount of income that allows for at least partial repayment of the debt may need to file for Chapter 13 instead. Also, those who do not have a very significant amount of debt may be required to file for Chapter 13 rather that Chapter 7.
What Happens to Debt During Chapter 7?
Chapter 7 bankruptcy generally wipes out most debts that people may have accrued. Medical bills and credit card balances are some of the primary debts that cause people to seek Chapter 7. With this type of bankruptcy, debts are eliminated within five months. Some debts, like student loans, tax bills and alimony, are not commonly discharged during a bankruptcy and may still be owed. Unfortunately for some, creditors may also seize any non-exempt property that the debtor owns to help offset the amount of their balance. For this reason, Chapter 7 is best for those with very few assets and little income.
It is very difficult to successfully file for Chapter 7 bankruptcy without the help of an experienced attorney. Chapter 7 comes with many stipulations and the possible loss of personal property, so it is best to have expert guidance during this process. A Chapter 7 bankruptcy lawyer helps their clients through the bankruptcy process and works to ensure a favourable outcome.