4 Facts About Chapter 7 Bankruptcy

Are you trying to get out of debt but having no luck? If you have tried everything and cannot find a way out, you could consider Chapter 7 bankruptcy. If you qualify for this branch of bankruptcy, you can experience significant relief from your debt problems. If you are considering this as an option, here are four facts you should know before you file.

1: You Cannot Use It If You Make Too Much Money

Fact number one is that Chapter 7 bankruptcy is not available for everyone. You can only use it if your income is less than a certain amount. If you earn more than the stated amount, you do not qualify for it. Therefore, your lawyer will examine your income when you initially meet with them. Performing this examination helps the lawyer see if you qualify for it. If you do not, you can use a different branch of bankruptcy.

2: It Provides Forgiveness on Qualifying Debts Only

The second fact to know is that Chapter 7 provides forgiveness of debts if they qualify. Not every debt you owe may be eligible for forgiveness, which means you may still owe money after filing. Your lawyer can tell you which debts qualify before you file, which allows you to make an informed decision about filing. If you find out that most of your debts will not qualify, using Chapter 7 is probably not the best solution for your issues.

3: You Will Finish the Case in Less Than One Year

The third fact to understand is the timing of a Chapter 7 case. Chapter 7 cases are fast, and most of them take less than one year to complete. If you want a quick way out of debt, this is the ideal option.

4: You Must Take Courses to Learn Budgeting and Financial Management Skills

The final thing to know is that you will be required to take two courses to learn about budgeting and financial management. All bankruptcy cases require two credit counseling courses, and the goal is to help people avoid needing it in the future. It would be helpful to pay close attention to the information you learn in these classes and apply it to your budgeting skills afterward.

Are you considering bankruptcy as a way out of debt? If so, you can learn more about it by talking to a bankruptcy lawyer. You can also find out if you qualify for Chapter 7 by meeting with a lawyer for a consultation visit.