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Should I File a Chapter 7?

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Title: Should I File a Chapter 7?


1
Should I File a Chapter 7?
A Guide to Choosing the Right Chapter of
Bankruptcy
2
Should You File a Chapter 7?
3
Deciding whether to file Chapter 7 bankruptcy
requires
4
Deciding whether to file Chapter 7 bankruptcy
requires
5
Have You Explored Alternatives to Bankruptcy?
6
Before filing for any chapter of bankruptcy, you
should make sure you have explored other options
7
Alternatives to bankruptcy can include debt
consolidation or debt settlement negotiation
8
Bankruptcy is a better alternative to other
measures such as
9
Bankruptcy is a better alternative to other
measures such as
10
Your Options for Bankruptcy
11
Chapter 7 bankruptcy is one of several options
businesses and individuals have when considering
filing for bankruptcy
12
  • Individuals usually choose between Chapter 7 and
    Chapter 13

13
Businesses can opt for Chapter 7 if they no
longer want to remain operational after going
through bankruptcy
14
  • Otherwise, business bankruptcies are usually
    filed under Chapter 11 or 13 depending upon the
    size of the business and how it is structured

15
How Chapter 7 Is Different
16
Chapter 7 differs from Chapter 13 bankruptcy for
individuals because
17
Chapter 7 differs from Chapter 13 bankruptcy for
individuals because
Chapter 7 allows you to discharge debts without
having to pay back a portion as part of a three
to five year repayment plan (Chapter 13 requires
a repayment plan)
18
Chapter 7 differs from Chapter 13 bankruptcy for
individuals because
Chapter 7 allows you to discharge debts without
having to pay back a portion as part of a three
to five year repayment plan (Chapter 13 requires
a repayment plan)
Chapter 7 requires liquidation of certain assets
so money can be generated to pay creditors
(theres no such requirement in chapter 13)
19
Are You Eligible To File Chapter 7 Bankruptcy?
20
When deciding whether to file Chapter 7, YOU
NEED TO ENSURE YOU ARE ELIGIBLE
21
Changes to the bankruptcy law in 2005 imposed
strict restrictions on who can file under this
chapter of the bankruptcy code
22
To file chapter 7 you must either have an income
below the poverty level in your state OR pass a
means test
23
The means test judges the amount of disposable
income you have available to you to pay back
debts after covering your required monthly
expenses
24
If you have no money to pay debts, then you can
pass a means test
25
Will Chapter 7 Take Care of Your Debts?
26
You also need to ensure Chapter 7 will actually
eliminate your debts before filing
27
In a chapter 7 filing, you can have credit card
debt, medical debt and personal loan debt
discharged
28
You cannot get rid of car loan debt or mortgage
debt unless you give up the car or house
29
You cannot generally eliminate student loan
debt, unpaid child support, or certain types of
tax debts or debts from certain kinds of lawsuits
30
A bankruptcy lawyer should be consulted to help
you assess whether your specific debts can be
discharged
31
Do You Have Assets to Protect?
32
If you have significant assets, you may not want
to file chapter 7 as the money or possessions
you have can be taken and/or sold to generate
funds to repay creditors
33
This does not occur with a Chapter 13 filing, so
if you are concerned about keeping all that
youve earned or acquired, a Chapter 7 may not
be the best choice
34
Are the Assets Covered by Exemptions?
35
Many types of assets in a chapter 7, however, are
considered exempt under state and/or federal
rules
36
(No Transcript)
37
If your assets that you are concerned about
protecting fall within exemptions, then you can
file Chapter 7 without worrying about protecting
them
38
A bankruptcy lawyer can help you to determine if
your assets are at risk in a bankruptcy filing
39
Chapter 7 and Your Credit
40
You should also consider the impact that a
chapter 7 filing can have on your credit
41
The bankruptcy CAN lower your credit score but
this is not always the case
42
If you are deeply in debt and making late
payments, bankruptcy can be the first step
towards starting to fix your credit score
43
Chapter 7 does generally do more damage to your
credit than a chapter 13 filing, so keep this in
mind when considering whether you should file
Chapter 7
44
Get rid of the troublesome debts that you have
and start to move forward towards a better
financial future
45
www.Lee-Legal.com
Bankruptcy Lawyer in Washington, DC, Maryland and
Virginia
(202) 448-5136 (703) 879-2870
Content provided by Best Legal Practices
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