Chapter 7 Bankruptcy Basics
If you are considering your options for Bankruptcy, our bankruptcy attorneys serving central Mississippi are here to help you understand the basics. There are two main ways individuals file personal bankruptcy under the U.S Bankruptcy Code: Chapter 7 and Chapter 13 Bankruptcy. Chapter 7 Bankruptcy allows debtors to eliminate most of their outstanding debt and start anew. A common synonym for Chapter 7 is liquidation. Under Chapter 7 a debtor may keep his home and property by reaffirming the debt. Any unsecured debts are discharged in non-asset cases. In the event the debtor has assets that are not exempt under state law, the trustee would use those assets to paid back. Chapter 7 Bankruptcy allows for a no-nonsense, direct way to wipe outstanding debts and legal anxiety over future accumulation of unpaid debt.
To qualify for relief, the debtor may be an individual, a partnership, or a corporation or other business entity. Debtors must also qualify under the “means test” and complete a required pre-filing session with a credit counseling service before being eligible to file a Chapter 7 Bankruptcy. The “means test” calculates whether your basic income is in not too high of a range in order for you to qualify. Generally, most individuals seeking bankruptcy will not run into a conflict with the means test. The means test figures your disposable income and if it is too high to qualify, Bankruptcy law treats this portion of income as what you should use to settle creditor debt instead of seeking Chapter 7 protection. If your household income is too high to file a Chapter 7, a Chapter 13 Bankruptcy may be an option.
After filing a petition, a case trustee will be appointed with the responsibility of conducting a meeting with you and your creditors, if they choose to attend. The case trustee is tasked with gathering information about your financial history, current financial status, and property within your possession. Cooperation with the case trustee will increase your means of receiving a successful discharge. The case trustee will move to liquidate nonexempt assets in order to pay outstanding debts. When this is complete, a discharge is usually granted. With a discharge, a creditor may no longer continue to request unpaid debts. In some circumstances, certain debts may not be discharges, such as student loans, taxes, and domestic support obligations. A court does have the power to revoke discharge for a variety of reasons. This is why quality, experienced counsel is strongly encouraged. Small legal mistakes such as fraudulent dishonesty or failing to report, may result in revocation. Although there are plenty Jackson bankruptcy attorneys, taking the time to find the one right for you is integral to the success of your filing.
Chapter 7 Bankruptcy is the quickest remedy in comparison to Chapter 13 Bankruptcy and does not involve a repayment plan. Your nonexempt assets will be directly used to settle any debt, so it is important to understand that filing for Bankruptcy under Chapter 7 will likely result in property loss. Filing under Chapter 7 will also immediately stop harassment from debt collectors and creditors.
Our Bankruptcy Attorneys serving the central area of the Mississippi have an extensive track record of satisfying clients who inquire about their options for Bankruptcy filing. While most firms take all matters into their own hands, our firm has provided important information below to ensure you understand the duties of a competent, quality Bankruptcy Attorney. Contact Us today for a Free Consultation.