What is chapter 7 bankruptcy?

As unfortunate as it may be, sometimes people find themselves in situations where they can no longer keep up with their financial obligations and the only way out is through bankruptcy. Bankruptcy is sometimes the only way you can save your home and become free of your debts.

When you make the decision to file for Chapter 7 bankruptcy, you should have an idea of how the process works. First, you will have to determine whether or not you are even eligible for Chapter 7 bankruptcy. You will be required to take credit counseling courses within the 6 month time period before you officially file. In addition to the credit counseling courses, you will have to take a debtor’s education course prior to filing.

Bankruptcy is a very document-heavy process and you will have to all of your financial paperwork prepared before the start of the process. You will need a list of your assets, your debts, all of your income, and an outline of your living expenses for each month.

Chapter 7 bankruptcy requires you to use some of your assets to pay off your debts. A trustee will determine how much all of your assets are worth and then determine what needs to be sold in order to compensate for your debts. You will also have to attend a meeting of creditors, or a 341a hearing, in which your creditors, lawyer, and trustee will gather to discuss your finances. One of the final steps in a chapter 7 bankruptcy is to take a means test. This looks at your income and compares it to similar households within the state.

If your petition for Chapter 7 bankruptcy is approved, you may be able to discharge your debts. The only debts that can’t be cleared are student loans, taxes, and child support payments. It is important that you have an experienced Chapter 7 bankruptcy attorney who can assist you in this process.

If you require experienced legal assistance for any of your real estate, bankruptcy or family law matters, contact the Mark Scollar Law Office today to schedule a consultation.