Most debtors, if given a choice would prefer to file Chapter 7 bankruptcy. Other than certain exceptions Chapter 7 discharges all debt and the debtor can move on. To be able to file Chapter 7 the petitioner must undergo and meet a means test which assess his or her income and debt level. Individuals who have an income in excess of that allowed for Chapter 7 may have his debt discharged if he relinquishes title to a valuable asset to the court appointed trustee who in turn liquidates it and uses the proceeds to pay the unsecured creditors. To ensure that you make all the right choices you should turn to a Salt Lake City bankruptcy attorney for guidance.
The advantages of chapter 7 bankruptcy:
Fresh start: The objective of Chapter 7 is to eliminate debt and give the debtor an opportunity to start all over, to give the debtor a whole new lease on his financial affairs. By eliminating certain debt there is no longer any personal liability but it must be said that certain debt such as student loans, alimony and child support cannot be forgiven and must be paid. There are also certain tax obligations that must be paid and any money which was gained through a fraudulent claim also must be repaid. Any property which is mortgaged, has a tax lien or a mechanics lien will remain burdened.
Keep future income: Once Chapter 7 bankruptcy has been declared any monies or property that is then acquired is not considered part of the asset base. There are a few exceptions to the rule if certain property should come into the petitioners possession within 180 days of the judgment, this can be proceeds from an inheritance, a divorce settlement, death benefits or proceeds from a life insurance policy.
No limitation of the debt: The Salt Lake City bankruptcy attorney will point out that there are certain limits on the amount of debt that can be discharged when filing for chapter 13; this is not the case when filing for chapter 7. There is no upper limit to the amount of debt for chapter 7 but under the rules of chapter 13, if secured or unsecured debt exceeds the limit set, this debt is ineligible for discharge.
No repayment plan: Those that elect to file Chapter 13 must draw up a repayment plan for the approval of the court. In Chapter 7 this is not a requirement as there is no need to consider repaying the debt after discharge.
Quick discharge: In most cases, When the debtor approaches a Salt Lake City bankruptcy attorney and files for chapter 7 the case can be settled very quickly. After a 60 to 90-day period, the petitioner can expect to see the court issue an order to discharge. At this point the trustee distributes the monies from the sale of the debtor’s property to the unsecured creditors and the case is closed.
A Salt Lake City bankruptcy attorney is the best to determine the best bankruptcy option. You are invited to contact the Law office of Andrew B. Clawson, PC for further information.
