A Chapter 7 filing is what most people think of when they hear about bankruptcy. It is their chance to begin life again debt-free. While this is the result for many people, this is far from automatic. In addition, a Chapter 7 bankruptcy comes with a cost.
Chapter 7 bankruptcy is commonly referred to as a liquidation. This is because the debtor must surrender some assets to be sold to pay creditors. Some of their assets are protected from this process. For instance, a Chapter 7 bankruptcy cannot result in the seizure of one’s home or some retirement accounts. In addition, the debtor may keep some assets to help them get a fresh start. Nevertheless, many of their assets can be taken from them in exchange for being free from debt. The money goes to pay creditors that lose the right to collect these debts in the future.
Qualifying for Chapter 7 Bankruptcy
This form of bankruptcy is not available to all debtors. First, they must undergo a means test to see if they make too much money for Chapter 7 bankruptcy. The system is concerned with abuse, and higher-income earners must opt for a Chapter 13 restructuring that does not discharge the debt. Chapter 7 will make much of the debt go away, with some exceptions. For example, student loan debt is usually not discharged in bankruptcy. Debtors should consult with an attorney to learn which type of bankruptcy best fits their situation.
Bankruptcy Attorneys Helping Georgia Clients
If you are stuck in debt with no way out, contact Moffitt Law LLC to discuss a possible bankruptcy filing. You can call us at (762) 212-3951 or contact us online to discuss what may be best for your situation.
Is Chapter 7 bankruptcy available for everyone?
No. There is a means test to see who is allowed to file.
Will I lose all my property in a Chapter 7 filing?
No. There is an exemption for some assets, and they cannot take your home or retirement assets.
How do I declare bankruptcy?
You need to file with the court and go through the bankruptcy process.