Check Out Total Lawyers' FAQs on Bankruptcy!
We know that you may have key questions about bankruptcy and how it will affect your finances. To assist you in getting some answers, Total Lawyers has compiled a list of FAQs to assist you!
If you still have questions after reviewing the FAQs, contact us at 1 (877) 349-1309 or complete our free bankruptcy evaluation form. We will then connect you with a local bankruptcy attorney in your area.
Chapter 7 FAQs
What is a Chapter 7 Bankruptcy?
Chapter 7 bankruptcy is the process by which the majority of your unsecured debts are discharged. Chapter 7 bankruptcy is also known as "liquidation" because non-exempt assets may be sold by the trustee to pay creditors. Most Chapter 7 bankruptcy debtors do not have non-exempt assets, so the liquidation process does not take place and the unsecured debts are simply discharged.
Am I Eligible to File Under Chapter 7?
Your eligibility to file under Chapter 7 will depend on whether or not you pass the Chapter 7 Means Test. The means test will compare your income to the median income of a family of your size in your particular state. If your income exceeds the median income in your state, your income and allowable expenses are examined to determine whether or not you are eligible to file under Chapter 7.
Is Chapter 7 Right for Me?
Chapter 7 is a good option if you have large amounts of unsecured debts. This may include medical bills and credit card expenses.
Chapter 7 bankruptcy also offers other benefits such as:
- eliminating your unsecured debts;
- giving you the benefit of the automatic stay; and
- saving your home and/or car from foreclosure and/or repossession.
Chapter 13 FAQs
What is Chapter 13 Bankruptcy?
Chapter 13 bankruptcy involves a full or partial repayment plan that will be administered through the bankruptcy court. You will submit a repayment plan to the court and if there are no objections to the plan, you will make monthly payments to the bankruptcy trustee. Usually, the repayment plan will last from 3-5 years. If you keep making all the payments according to schedule, at the end of repayment period, you will receive your Chapter 13 discharge.
Am I Eligible to File Under Chapter 13?
There is no means test to qualify for Chapter 13 bankruptcy. However, in order to be eligible to file under Chapter 13, you must have a steady, regular income that will allow you to make payments to the trustee assigned to your case.
Is Chapter 13 Right for Me?
If you are facing a short-term financial crisis, then Chapter 13 bankruptcy may be the right option for you. Chapter 13 will give you the opportunity to get back on your feet if you have experienced a job loss, an illness, or other unexpected expenses. In Chapter 13, you will also get the benefit of the automatic stay and this will give you time to repay your creditors within the 3-5 year time span.
Should I Choose Chapter 7 or Chapter 13?
That will depend on your specific circumstances. If you have a lot of unsecured debt and little or no income, Chapter 7 may be your best option.
If you have regular income and non-exempt property you would like to keep, you may want to file Chapter 13.
An experienced bankruptcy attorney can assist you in deciding which option is best for your situation.
