When it comes to filing for bankruptcy, the process is not one size fits all. Indeed, there are several different types of bankruptcy an attorney will discuss with you and what you choose depends on your situation.
In this video, you will learn about Chapter 7 bankruptcy. Chapter 7 bankruptcy allows you to discharge your debts. Furthermore, when you file for Chapter 7, creditors are temporarily barred from taking action against you. Before you can even file for Chapter 7 bankruptcy, however, you have to meet with a counselor to determine whether you are eligible. This process is called the “means test.” The means test is formulated to determine whether your monthly income is less than that of the median state income. If your income is greater than the median, you will not be eligible for Chapter 7. If you are eligible, you then go through the liquidation process in which non-exempt property is transferred to creditors. Like always, there are certain debts that are exempt from discharge like alimony and student loan debt, among others.