Debt Resolution With A Chapter 7 Bankruptcy
If you’re having trouble resolving debt problems on your own, it may be time to consider other options. There are strategies that exist to help individuals in severe debt situations including debt management and debt consolidation but when these methods don’t work, you may want to seek the legal counsel of a bankruptcy attorney. He or she might advise you to file for bankruptcy.
Chapter 7 bankruptcy is one of many bankruptcy types recognized by the federal government. It allows for debt resolution, but in order to qualify, debtors should not receive income that surpasses the state median income on a monthly basis. If income levels are above the state median, debtors must submit a means test which measures financial solvency by analyzing income, expenses, secured and unsecured debt.
How To File for Chapter 7 Bankruptcy
If it is determined that you meet the Chapter 7 bankruptcy requirements, you can start the process. The first step in the process is an appearance at your local bankruptcy court to file a petition. During this time you will also be required to submit financial data including:
- Financial statements
- Asset records
- Liability records
- Income records
- Expense records
- Financial reports that describe your overall financial standing
- Contracts or leases in your name
The next step after submitting all the required documentation is to agree to attend credit counseling from an approved provider. Court and filing fees must also be paid in order for the bankruptcy proceedings to begin.
A Chapter 7 BK is also known as liquidation bankruptcy. Rather than setting up a repayment plan with creditors that would extend over several years to settle your debts, a trustee is appointed to your case and sells all of your assets that are not protected by state and federal law. The proceeds are used to pay your creditors.
Asset eligibility varies from state to state, so it’s important to consult an attorney that specializes in bankruptcy law so you know exactly if and how to proceed. Some states require the debtor to relinquish homes and cars, but other states allow for the debtor to keep those items. In most cases the following assets are used to discharge debt:
- Checking and savings accounts
- Collections and family heirlooms
- Other valuables
Life After Chapter 7 Bankruptcy
After your assets have been liquidated, you are no longer liable for any remaining debts that were designated in the bankruptcy and under state and federal statutes, creditors can no longer attempt to collect money on unpaid balances. The obvious disadvantages to filing Chapter 7 include the loss of possessions and long-term credit report damage.
BKCarFinance is not a law firm and does not provide legal advice. If you’re considering a BK 7, we urge you to seek out the services of an attorney that specializes in bankruptcy law.
Getting a Car Loan After a Discharged Chapter 7
Believe it or not, once a Chapter 7 bankruptcy has been discharged it’s usually quite simple to obtain an auto loan provided you are working and have a gross monthly income of at least $1800.00 dollars. There are many lenders that offer car financing for this type of situation, including ones we work with.
Disclaimer: This information was created to inform and educate the public but in no way should be considered legal opinions or legal advice. BKCarFinance is not in the business of providing legal advice. If you want to know how to file for Chapter 7 bankruptcy, please contact a bankruptcy attorney.