Declaring bankruptcy offers individuals and businesses a way to eliminate or reorganize debt and start over financially. It does affect your credit for a short time, but you can improve your credit after you file for bankruptcy. Chapter 7 is used mostly by individuals and it is designed to eliminate debt. Bankruptcy Lawyers in Bel Air MD can help you with filing Chapter 7 or advise you on other options if you do not qualify. The following information will provide you with the basics of Chapter 7 bankruptcy.
This form of bankruptcy is also called liquidation bankruptcy since the debtor’s assets can be sold to pay off certain types of debt in exchange for debt forgiveness. This kind of bankruptcy relieves the debtor of most financial obligations and provides for certain exemptions.
Chapter 7 Exemptions
Each state regulates the exemptions for Chapter 7 bankruptcy. People filing for bankruptcy in Utah are allowed to exempt set amounts of their home and vehicle equity. The home equity amount is up to $20,000 and up to $2,500 for a vehicle. Exemptions will be determined according to the debtor’s financial situation and debt load.
Chapter 7 Discharge
Once the paperwork is filed and completed, most or all financial obligations are discharged. This can include debts like credit cards, pay day loans, repossessions, certain liens and judgments, personal loans, and other unsecured debt. Financial obligations that cannot be discharged include things like child support, alimony, student loans, and certain taxes or other government debt obligations. Any debt that was obtained through fraudulent means cannot be discharged through bankruptcy.
Chapter 7 Eligibility
Qualifying for Chapter 7 bankruptcy is a two-step process. Your income is compared to the average income of a family of the same size as your own. If your income is found to be below the average in this situation the second step is to calculate your disposable income (excess money). Bankruptcy Lawyers in Bel Air MD will help determine your eligibility for Chapter 7.
If you find yourself in dire financial trouble and no way to pay your debts and still provide the basic necessities for your family, Chapter 7 bankruptcy may be a good solution. Christman & Fascetta offer free consultation for people who want to find out if they can qualify for this kind of bankruptcy. This gives you a no-obligation, no-risk way to decide if Chapter 7 will help you.
