If bankruptcy seems to be in your future, it can be beneficial to know a few important facts before you make that big move. Read on and make a better chapter 7 bankruptcy decision.
What About the Fees?
While it might seem unfair, those who need financial relief must pay the filing fee. The fees are the same in each state because bankruptcy is a federal filing. If you have issues with your case, which is extremely uncommon, you might incur other court fees. For instance, if one of the creditors objects to their inclusion in the bankruptcy, a hearing or two might be needed.
The main way to cut down on paying extra court fees is by using a bankruptcy lawyer. They can help you avoid issues by ensuring that your paperwork is correct the first time and that your filing is complete and accurate. The cost to hire a bankruptcy lawyer is more than worth it and usually involves a one-time upfront fee.
What About Income?
The bankruptcy code has rules preventing wealthy people from filing. The means test allows some filers who exceed the state's median income level to still file if they meet the guidelines. Discuss this issue with your bankruptcy lawyer.
How Long Does Bankruptcy Take?
The time for chapter 7 processing varies depending on the backlog in the court and the nature of the case. For normal, problem-free chapter 7 cases, your case can be over in a matter of months. While some filers can expect to be finished in less than six months, things can vary too much to predict how long your case will take.
What Can I Lose?
Chapter 7 is known as the liquidation bankruptcy because of the possibility of losing property. However, most filers don't lose assets because they use exemptions to keep certain amounts of property. Exemptions cover homes, vehicles, and more. When considering your asset's value, be sure to note how much is owed on the item if there is a loan balance. If you have a great deal of valuable property, make a complete list of it along with its value and speak to your lawyer about what might be surrendered.
What Debts Are Forgiven?
In most cases, all credit card, medical, and personal loan debts are discharged with chapter 7. If you are behind on your home or vehicle, however, you could lose them if you don't get those payments caught up. Student loan debts, new tax debts, and certain legal debts may not be included in your bankruptcy.
To learn more about any of the above, speak to a bankruptcy attorney.