You must follow various steps to commence the Chapter 7 bankruptcy filing process. For instance, you must file and submit multiple forms, depicting your bank statements, tax payments, and financial statements. The process can be rigorous, and you should consider hiring a legal expert to help you. In addition to helping you with the filing process, the lawyer will also represent you in court. They will guide you through your bankruptcy case and ensure the filing process is successful.
However, you should consider various tips to ensure you succeed in the process.
Evaluate Your Debt
Chapter 7 bankruptcy filing allows individuals to start afresh after amercing many debts beyond their financial capability. The process is also fair since the creditors are allowed to regain some measure of the debt. As such, not all debts are discharged when you file for bankruptcy. For instance, some debts that cannot be discharged include child and spousal support, tax debts, and student loans.
However, you can discharge your credit card debt, medical bills, phone bills, gym membership bills, and apartment leases. Thus, you need to evaluate your debt and know where it falls. It allows you to plan for non-dischargeable debts after receiving the financial reprieve.
Identify Your Exemptions
The law has lucidly highlighted various exemptions that highlight the items people can keep after they initiate the Chapter 7 bankruptcy filing process. It means that creditors cannot take these items to cover their debt. For instance, you can keep your household furniture, appliances, bedding items, clothes, and kitchenware.
Furthermore, if you have a business, you can keep the tools that help you with your business operations. Thus, you need to know these exemptions before filing for bankruptcy. You should consult a lawyer if you have specific items that you do not know if they are exempted.
Ensure You Are Eligible
Not everyone can file for bankruptcy. As such, the law has established an eligibility test determining those who can initiate the Chapter 7 bankruptcy filing process. The Chapter 7 bankruptcy litmus test considers several things, including your gross income and assets. You should calculate your gross income. Then double the amount and compare it to figures your state has provided as the average income of someone with your family size. You will qualify for bankruptcy if your figure is below the state's allocated figures. Ensure you calculate your income and assets accurately to determine your eligibility.
For more information, contact a company like McManus & Associates.
Share1 September 2022
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