It is extremely easy to get into debt and become unable to make your monthly payments in today’s world. Most people build up their debt over time and have every intention of paying it back. If you lose an income, experience a major unexpected expense, or have some other circumstance hit, however, you may find that you can’t keep up with your finances. When this is the case, a Chapter 7 bankruptcy may be the ideal solution. Take a moment to learn more about this type of bankruptcy to see if it is right for you.
Who can File for Chapter 7 Bankruptcy?
In order to file for Chapter 7 bankruptcy you need to meet the qualifications, which are:
- No previous Chapter 7 bankruptcy in the last eight years.
- Have a specific income (individuals with higher incomes won’t qualify).
- Your income to expense ratio needs to be such that it is clear that you will have trouble repaying the debt without the bankruptcy.
- If the courts determine that a Chapter 13 bankruptcy is not possible.
If you meet these requirements, you will typically be able to file for a Chapter 7 bankruptcy. Those who do qualify will find that this is usually the ideal bankruptcy option since it makes it much easier to quickly eliminate your debt.
What Debts Can be Eliminated?
Most types of debts can be eliminated through a chapter 7 bankruptcy. Things like a credit card, personal loans, medical, and others can be either wiped out completely, or dramatically reduced. You can also eliminate car loans and mortgages in many cases, though you’ll also have to give up those items as explained below. Types of debt that you typically can’t eliminate will include tax debt, student loan debt, back child support, and back alimony.
What Happens to Your Property?
If you have any debt that is secured by property, such as a home or a vehicle, you will usually have a couple of different options. First, you can eliminate that debt, but you would also have to give up the property so it can be sold to repay as much of the debt as possible. The other option is to keep the property, but you would have to keep the debt as well. In some cases, the courts will help restructure the debt in order to make it easier for you to keep up with your payments.
Do You Need Help with a Chapter 7 Bankruptcy?
If you are having difficulty with your finances and can’t get it under control on your own, we can help. Contact us to see if filing for Chapter 7 bankruptcy protection is a good solution to your situation.