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The Pros and Cons of Chapter 7 Bankruptcy

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When choosing between Chapter 13 and Chapter 7 bankruptcy, you should learn more about their pros and cons. Basically, there are different reasons why many debtors choose the second one. This is what enables them to save most of their valuable property and time. If you want to access the same benefits, you need to ensure that you can qualify for this bankruptcy type. This is when the services of qualified lawyers will come in handy.

It is necessary to pass the means test to become eligible to file for Chapter 7 bankruptcy. This means that you should prove that your average income is not enough to stick to any debt repayment plan. Find out more about the laws related to Phoenix bankruptcy filing if you live in this area. That’s because laws and rules may differ from one state to another.

After filing your bankruptcy petition, your case will be reviewed within 6 months maximum. This is what will let you get rid of most debts, including unpaid car loans. Don’t forget that some of them can’t be discharged. The most common ones include student loans, fraud debts, taxes, child support, and so on.a drawn human with a magnifying glass

When making your decision to file for Chapter 7 bankruptcy, you need to understand that you will lose your non-exempt assets. They will be taken and sold by a trustee to help you meet your debt obligations. The good news is that you are still able to save exempt assets, such as your household items, clothes, and so on.

Keep in mind that not all debtors are eligible to benefit from Chapter 7. For example, if their income is enough to fund a repayment plan under Chapter 13, their petition will be refused. There are certain requirements that must be met during this process. You need to pass a special test to determine your regular income, attend a meeting of creditors, provide detailed information about your debts and finances, and so on.

This means that this process is quite complex, and that’s why you should hire experienced and licensed bankruptcy lawyers. It is hard to get through bankruptcy filing on your own. Don’t risk your valuable assets and future. The best part is that you will be able to have a fresh financial start after resolving your case. Try to rebuild your credit score as fast as possible and avoid making the same mistake in the future.

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