- Who Pays for Bankruptcies [Filing Chapter 7: Is It The Right Thing]
Who Pays for Bankruptcies [Filing Chapter 7: Is It The Right Thing]
Filing Chapter 7 happens to millions of people each year. While there are more and more cases that are being turned away due to the new bankruptcy laws in place, many are still finding benefits in filing these discharges. TO learn if this is the right choice for you, there are several things that you must do first.
1. Determine if you have done everything in your power to lower your debt on your own and come up from under it.
2. Determine if you qualify by talking with your attorney about if you qualify for Chapter 7 or Chapter 13. Usually taking a means test with him or her will determine this.
3. Finally, educate yourself about what the process entails.
There are some very important things you should know about filing Chapter 7, then, before making your decision.
You should know that the best person or couple to file this type of filing is that of someone that has little or no assets. Because your creditors can stake claim on those goods, you will need to relinquish anything that is of value.
Each state has provisions in place to determine what you can and can’t keep when filing. For some, you will be able to keep the equity that you have in your home. In others, you will have to turn over your household goods that are in excess of a certain dollar amount. In some states, you can keep your wedding rings.
When it comes to your home and your car, these too change depending on the location that you live in. IN some areas, you will be able to keep them if you are current on your payments and your lenders agree to continue with the payment plan.
In other cases
You can lose your home or cars to your bankruptcy filing. The funds from any sale of assets will go towards paying off the money you owe in debt to your creditors. Even if it is just a little amount, it will be split fairly.
The process of filing Chapter 7 can take any place from three months up to five or six months before your debts are finally discharged. During this time, you can’t apply for new credit or spend on your old credit. In addition, there are restrictions on how often you can file Chapter 7.
Is it right for you? You should talk to your attorney to learn more about whether this is the right choice for your financial future or not.
What Filing Chapter 7 Won’t Take Away
You are considering filing Chapter 7. You realize that this is one of the largest decisions you’ll ever have to make. But you also know that it is something that must be done to pull yourself out of the debt that you are under.
The fact is that many people assume that when they file Chapter 7 they will be cleaning up any and all debt that they may have.
Unfortunately, this is just not the case. In fact, it is likely that many of the debts you have won’t be able to be discharged in your filing.
First, Do You Qualify?
The first consideration you have to have when filing Chapter 7 is if you even qualify for this type of action. The fact is that most people that have filed in the last few years have done so without much thought about this. Yet, as of October of 2005, this was no longer the case.
Those that filed after this point were the ones that will have to consider this as a new law went into effect limiting the number of people that can do this.
To determine if you qualify, you will need to contact your attorney. Find one that specialized in bankruptcy and in cases such as your own. Then, he or she will walk you through a process called a means test in which you will be asked questions about your situation. If you “pass” the test, you will learn if you can file Chapter 7 or if you will be required to file Chapter 13 instead.
What’s Not Included
Even if you do get to Chapter 7, the fact is that there are some loans and debts that can not be discharged through bankruptcy no matter what the situation is. Those include such things as your federal student loans, or federally backed student loans, alimony.
Our child support payments, and debts that were incurred due to fraud. You are not able to discharge any payments that are required due to the liabilities of driving drunk or any criminal fees, restitutions or penalties that you may have.
Are you still considering filing Chapter 7? If you are, you will find countless benefits if you spend the time filing the right away, on time and then once you get out from that pile you do what you have to do to maintain your financial success. You can do all of these things with hard work and determination.
Why Is Filing Chapter 7 A Good Plan?
Often times, it is common to hear people say negative things about those that file Chapter 7. Yet, those that have done this are the first to tell you just how beneficial it is to their lives. Is it a good thing? Is it cheating others of what you owe them?
For each person there is a different outlook on this, yet the bottom line is quite clear. The fact is that people are seeking help when they are seeking Chapter 7 and by far most cases are from those that are looking for light at the end of the tunnel rather than those looking to cheat others.
Why It’s A Benefit
There are several reasons why filing Chapter 7 can be a benefit for you. Here are some things to look forward to.
- With debts being discharged, not only are you financially free but you are emotionally free from the stress and anguish over how you will make ends meet. This relief is something that can change your life from worry and anxiety to a new beginning of hope.
- Within a matter of months, you will be eligible for new loans. While it will cost you a large amount of money to use these loans, there is the possibility of making it happen at any rate. That means that you have a chance at rebuilding your credit so that you can move on to better things later on in life.
- You will end the calls from creditors and you will be able to stop most of the garnishments that you are facing. When you do this, you’ll find yourself facing peace in your home again.
- You can learn from your mistakes with credit and debt and begin a new chapter. By filing Chapter 7, you can begin to see how to correctly manage money so that you don’t find yourself in so much trouble.
- You can work on building a savings account, an education fund and even a retirement account when you don’t use credit, but work off a cash only system.
These are just some of the many benefits that are yours to take full advantage of when you file Chapter 7. The end result is simple. When you file this bankruptcy, you have a new beginning waiting for you. With this fresh start, you can do and be anything you really want to be.
Filing Chapter 7: Retaining A Qualified Attorney
When you have to file Chapter 7, you have to find a qualified attorney to help you. Although you can try to file on your own, it is safer and much more productive if you hire a professional to handle this process for you. Why is it important?
How do you know who the right attorney for the job is? There are several considerations you must think about prior to walking into a court of law and declaring that you are bankrupt.
Why An Attorney?
While in most areas you can handle your filing of Chapter 7 bankruptcy on your own, it is vital to consider why hiring a new attorney would be a better choice. First of all, the laws regarding this filing have changed.
They are quite strict about filing deadlines and various pieces of paperwork that must be submitted. This was put into place to stop people from abusing this process.
Nevertheless, if you try to handle your bankruptcy yourself, and your creditors fight you on doing so, you may not have the knowledge and expertise to make sure that your debt is discharged. You may lose extra assets or you may have the entire thing rejected by the court. For that reason, hire a qualified attorney.
What To Consider In An Attorney
There are several qualifications to look for in an attorney.
- Hire someone that is skilled at bankruptcy law, not a general attorney that may not know the intricacies of the new bankruptcy laws.
- Hire someone that you know or you can trust. If you don’t know an attorney, meet with several and talk about your case. Does your attorney make time for you? Does he answer your questions? Does he seem rushed? Trust your instincts.
- Find someone that offers a fair price for doing this work. Most will require payment upfront and will not proceed with the filing until payment is made. Some off no cost financing on this service, too.
- Research the attorney. You can learn more about them by looking for information on the web about them. By talking to fellow clients in the waiting room and by checking out his law firm at the Better Business Bureau.
The process of filing Chapter 7 is not simple, nor is it something that is going to take just a few hours of work. You’ll need someone that knows that they are doing by your side. To make sure that the process goes as smoothly as possible.
Is Filing Chapter 7 In Your Future?
Filing Chapter 7 is a way for people to get a new lease on their financial life. Although it does have serious implications, often it is something that must be done. Nevertheless, it is important to weigh your options. Is this something that you need to do?
Is this something that you may be able to avoid? It can be very difficult to understand what the right road to take is. After all, you have made a promise to these creditors to pay them and now you are struggling to make ends meet.
When To File
For every person, whether or not you file Chapter 7 is up to you to determine. Although there are a number of different times when it is a very good idea. There are many that file that don’t need to do so.
For this reason, new laws have been put in place. To determine just if you qualify to file in the first place. Your attorney will walk you through understanding if Chapter 7 is right for you. If Chapter 13 is a better choice of if you don’t qualify for either.
Many times, there will be times when filing Chapter 7 is a good thing. For example, with the rising cost of medical care. It is very possible that if you have extraordinary medical bills that this may be a good time to file.
If you can’t pay them off or you have been injured and don’t have a means to pay them off. It may be necessary for you to file.
For others, credit card debt or real estate debt can mount quickly. The rule for those that file Chapter 7 is that if you have assets that in most cases. They will need to be sold off to repay the debt that you owe. Each state has different allowances for what can be kept and what can not. Again, your attorney will work through this process with you.
The best course of action for many is to look at what they owe. Factor in the interest that they would be paying on that amount and determine. How long it could possible take them to repay their debt. Although you may not realize it. It may be far too costly in your financial future to not file Chapter 7.