Filing for bankruptcy in the U.S. courts provides options to people who are struggling with their debt. They may be considering bankruptcy because of creditor harassment, garnishment, repossession, foreclosure, lawsuits, illness or disability, loss of income, license suspension, or divorce, among others.
One of the types of bankruptcy is known as Chapter 7 bankruptcy because it is based on the United States Bankruptcy Code. Very simply put, Chapter 7 equals debt relief plus financial protection.
This form of bankruptcy was designed for eliminating unsecured debt. This includes credit cards, medical bills, utility bills, parking tickets, payday loans, and some personal loans.
A Chapter 7 bankruptcy can include the protections of the automatic stay and specific exemptions. Both programs are part of the bankruptcy code in every state, to help people protect their homes, cars, wages, and other vital possessions from their creditors. These programs are also for preventing foreclosure.
These bankruptcies will usually work best under the following conditions:
* You have much credit card and medical debt.
It has been mentioned that this type of bankruptcy is designed to eliminate unsecured debt, which includes credit card and medical bills. It will usually be fast-acting, and you will not have to wait years for a fresh start. It still has a number of steps and stages though, and each requires completion of filings, processes, and meetings.
* You do not have much of an income.
To qualify for this type of bankruptcy, your income has to be low enough to pass the bankruptcy means test, which is a formula intended to keep those with higher incomes from filing for Chapter 7 when they should be filing for Chapter 13. It is not really like an exam in school.
If your monthly income is less than the median income for households of your size in the state where you live, then you pass the test and you can file for Chapter 7. However, if your income is greater than the state median, the means test computations are more complicated. You will have to determine whether, after you pay the allowed monthly expenses, you have enough income left over (the so-called disposable income) to pay off at least part of your unsecured debt. If your disposable income is greater than a certain amount, you fail the means test and cannot file for it.
Online means test calculators are an easy way to get an estimate of your eligibility. A local bankruptcy lawyer can also help you out. After passing the means test, you may also need to complete a credit counseling course.
* You do not own much property.
The property protections under Chapter 7 vary from one state to another, but generally, Chapter 7 gives less protection for property than chapter 13 does. Exemptions of Chapter 7 can allow you to keep your home, your car, and other valuables like work tools, appliances, furniture, clothes, photographs, and books.
What have just been discussed are the basics. They will help you find out whether Chapter 7 bankruptcies are suitable for your needs.
Author Resource:-
If you're looking for Las Vegas bankruptcy lawyers, talk to Iglody Law. They offer bankruptcy and commercial legal services. Their firm is close to all of Las Vegas.
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