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 877-421-3761 or complete our free bankruptcy evaluation form. We will then connect you with a local bankruptcy attorney in your area.
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.
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.
Chapter 7 can be a good option for those who have large amounts of unsecured debts. This may include medical bills and credit card expenses.
Chapter 7 bankruptcy also offers other benefits such as:
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.
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.
For those facing a short-term financial crisis, Chapter 13 bankruptcy may be a good option. Chapter 13 may 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 should 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.
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.
A bankruptcy attorney in your area can assist you in deciding which option is best for your situation.
To speak with a local bankruptcy lawyer, call Total Lawyers at 877-421-3761 or fill out our free bankruptcy case evaluation form and we'll put you in touch with a bankruptcy attorney in your area within minutes.