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Chapter 7 Bankruptcy

Chapter7Bankruptcy.jpgIn a Chapter 7 bankruptcy, a bankruptcy trustee will cancel many of your debts for you. This trustee may also sell some of your assets to repay your creditors. The process can take anywhere between 4 - 6 months. It will cost an individual $335 to file and for fees. This will only require someone to go to court one time, then the court will make the decision. It's important to understand that just because you are financially struggling, does not mean that Chapter 7 bankruptcy will be the solution for you. 

In order to file for Chapter 7, you will have to fill out a petition. There will be a bunch of forms that you will have to fill out and file in your local area. In these forms, you will be asked to describe your property, your income and monthly expenses, your debt, property you owned, the money you have spent, property you sold, and more. There are plenty of instructions online in order to know how to properly fill out these forms.
You can apply for Chapter 7 bankruptcy, but that doesn't mean you will be eligible. You must meet a certain criteria. Your income cannot be over a certain amount in most situations. If you have filed for bankruptcy at a different time in your life, depending on the time frame, the court may dismiss your case. There are several situations which will not make you eligible for Chapter 7 bankruptcy.
If the judge in court believes that you have enough money to pay back the money you owe in a Chapter 13 repayment plan, then you will not be eligible. If you want to file, certain circumstances may force you into Chapter 13 bankruptcy.
Individuals that usually are eligible for chapter 7 bankruptcy are disabled veterans whose debts occurred during active duty. Other individuals that usually will get the approval are people who have debt from the operation of a business.
In order to find out if you can file, you must figure out your financial situation. You will have to figure out how much money you make per month, as well as the median income for a family of your size in your state. You will want to examine the average amount of money that you made each month for the last 6 months. If you are making less or equal to the median, then you are most likely eligible. If you are making more than that, then you will need to pass "the means test".
The means test is a way to see if you would be able to pay off some of your debt. The test is to see if you would be able to pay these debts in a 5 year payment period.
If you have received discharge of your debts within the last 8 years, or a Chapter 13 bankruptcy, then you cannot file again.
If you feel that you may have to file for bankruptcy, then you will definitely want to contact a lawyer with experience for advice. A lawyer will recommend what the best option is for you, as well as will be able explain everything in further depth.
Sources: NOLO 

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