When you are behind in debt and worry every day whether you can pay your bills or not, you may want to consider filing bankruptcy. Chapter 7 bankruptcy cases are usually the shortest form of personal bankruptcy. You can file Chapter 7 if you live in, have property, or a business in the United States.
Most people lose little to no income in a Chapter 7 bankruptcy. Your trustee will evaluate your assets, and if you have property that is not exempt and very valuable, it may be sold and distributed to your creditors. Due to the generous exemption allowance, most people do not lose much property. Exemptions can vary by state, so be sure you seek counsel from a local bankruptcy attorney to guide you through the exemption process.
In order to qualify for bankruptcy, you also must pass the means test. The means test will determine if your income is at or below your state's median income. If your income is at or below the median income, you will pass the means test. If you make more than your state's average income, the bankruptcy court may turn your case into a Chapter 13 instead.
If your trustee feels that you are abusing the bankruptcy system, they may ask the judge to dismiss your case. Reasons for dismissal could be because you are using bankruptcy to harass your creditors or if you used your credit cards to purchase a large amount of non-essential items just before filing bankruptcy. Additionally, if you received a bankruptcy discharge within the last eight years, you will be disqualified from receiving another discharge in Chapter 7.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy is a type of personal bankruptcy permits you to maintain possession and ownership of your assets. In return you agree to pay a reasonable percentage of the debt through a payment plan. The trustee will distribute the monthly payments you make to the court to your creditors. Repayment periods last usually three or five years, depending on your income and level of debt. At the end of Chapter 13 bankruptcy, any remaining qualifying debt will be eliminated.
If you are overwhelmed in debt and are considering Chapter 7 bankruptcy, contact a Citrus Heights bankruptcy attorney today to find out what your options are.