You can discharge a lot of your debts through Chapter 7 bankruptcy and start fresh financially. When you file for Bankruptcy Chapter 7, it will erase credit card debt, medical debt, car loans, and payday loans. It may even erase some federal loan debt.
Analysts put the number of Americans who are in bankruptcy at more than 39 million. Nearly 272,000 filed Chapter 7, and more than 447,000 filed other individual bankruptcy chapters (Chapter 12, Chapter 13, and Chapter 11) during March 2023 and March 2024.
In a Hurry? Dial +18-503-850-342 Now!What is a Chapter 7 Bankruptcy?
Chapter 7 bankruptcy, really a court procedure where you can cancel some of the debts you can’t pay. You’ll be required to fill out a few forms to file. These forms inform the bankruptcy court regarding your income and expenses, your property, and your debt. If you can’t do this, you’ll be required to provide your latest tax return and paycheck stubs as well.
Your forms and paperwork will next be examined by the trustee of bankruptcy. You will be interviewed by the trustee from your creditors, who will be asked questions related to basic issues of your finances.
You will also be required to complete two courses: one about handling your finances and the other about credit counseling.
The court will send you notice after some weeks of your bankruptcy cancellation. That means that you have won your case and all your debts are erased.
Who Is Eligible for Chapter 7 Bankruptcy? What Should They Do?
There’s a difference between who’s permitted and who ought to be.
Chapter 7 is available to most people who earn less than the median state income, depending on household size. This is because they qualify with the means test crafted by bankruptcy statutes. The means test considers your six-month average of monthly income.
You will be eligible if you are unemployed and make less than minimum wage. You can’t go ahead if you don’t pass the means test.
Those who need a do-over have three very different types of situations. Who should:
- It’s time to file Chapter 7 bankruptcy
- Wait for a couple of days and then petition for Chapter 7 bankruptcy before
- Don’t petition Chapter 7 bankruptcy
Who Has to Wait to Petition for Chapter 7 Bankruptcy?
Timing is critical in petitioning Chapter 7. You may have to wait to petition your case if any of the following is true for you. Most bankruptcy professionals will advise you to hold off on filing your case if you keep using credit cards to purchase expensive items or if you have not yet filed a bankruptcy case. You should also hold off if you’ve made payments or sold property within the past year. These will have to be disclosed on your bankruptcy forms, and your trustee will likely ask about them.
It is recommended to wait before filing for bankruptcy if you are suing or about to sue another person until you get the outcome of your case. Most people wait before filing Chapter 7 bankruptcy if they expect a settlement of a personal injury. If you’re delinquent in rent and will not be moving out, then try to play catch-up with the outstanding rent before continuing to file. If you do not intend on parting ways with your vehicle, ditto the car loans.
Think that your finances will be hurt in the long term, then you can probably wait and file for bankruptcy later. You can only file for bankruptcy Chapter 7 every eight years, so you do not want to file unless your debt increases.
In a Hurry? Dial +18-503-850-342 Now!How Long Does Chapter 7 Bankruptcy Last?
If you’re a clean person, the majority of people can have their bankruptcy forms completed in a week. Within a 1-2 month timeline after you’ve filed your papers, you’ll receive a 341 meeting with the trustee in charge of your case.
If everything goes smoothly, you will receive a letter from your trustee 2-3 months after the meeting. This will inform you that your debt has been legally discharged. It is about 4 to 6 months from the time you file for Bankruptcy Chapter 7 until debts are discharged.
How Much Does Chapter 7 Bankruptcy Cost?
The federal bankruptcy court costs $338 to file. If You qualify for a fee waiver if your household income is at or below 150% of the Federal Poverty Level. You qualify for a waiver if you’re unemployed or on Social Security benefits. You can pay in installments if you file and the court grants it.
The cost of the two courses taken online varies between $10 and $100, depending on which credit counseling organization one chooses. The courses are also fee-waiver eligible.
The fee for the attorney is highest in bankruptcy. The Chapter 7 averages $1,500. You don’t necessarily have to pay an attorney to win a Chapter 7 bankruptcy case. Check to see if your case is eligible to use Up-solve free filing tool.
Bottom Line!
The majority of individuals who finish Chapter 7 are thrilled to have their medical and credit card debt evaporate. Most individuals are surprised to learn that people with a credit score less than 600, who had discharged their bankruptcy, had their score increase after filing.
When you file for bankruptcy Chapter 7, it remains on your record for 10 years. Of course, most people do find that their credit does recover and can get a home loan within a few years if they make good financial decisions after their bankruptcy.
The amount of debt, your situation, and other sources of debt relief will dictate whether or not you have to file for bankruptcy Chapter 7 or otherwise. Filing timing is also relevant. You will be able to have a clearer picture of options through attending a credit counseling session or requesting a free analysis.
Schedule your free consultation with Bruner Wright PA today and take control of your financial future.
Contact Bruner Wright PA today for a free consultation.
In a Hurry? Dial +18-503-850-342 Now!