Answering common questions about Chapter 7 bankruptcy
If you have amassed debts that you are unable to repay, you should consider various means of debt relief before things get worse. Bankruptcy should be your last resort, not the first one. Options like debt consolidation and negotiation with creditors may work for some people. There are different chapters of bankruptcy in the United States, of which Chapter 7 is the most common one. Hiring a bankruptcy attorney in Charleston, WV can help you understand the key aspects, and for your help, we have answered a few common questions.
How does Chapter 7 bankruptcy work?
You will need to complete the necessary paperwork and submit the forms to the bankruptcy court. The court will appoint a trustee, who will hold your 341 Meeting of Creditors. If the court grants you bankruptcy discharge, you will get a letter for the same. The bankruptcy trustee will then take over your non-exempt assets, which will be used to repay your creditors.
What type of debts can be discharged through Chapter 7 bankruptcy?
Chapter 7 bankruptcy can help erase most of your unsecured debts, including unpaid credit card bills, medical bills, payday loans, unsecured personal loans, and utility bills. However, there are exceptions to this. If you are paying alimony and child support, you have to continue to make those payments. Other debts that cannot be discharged include tax debts and student loans.
Can you retain your house?
Yes, you can. Chapter 7 bankruptcy allows you to retain some of your secured debts as long as you can continue making the payments as per schedule. If you want to give up your secured properties, you can do that to erase your debts.
How to qualify for Chapter 7 bankruptcy?
Chapter 7 bankruptcy is best suited for people who don’t have high incomes and considerable unsecured debts. However, to qualify for Chapter 7, your disposable income should be lower than the state median income. This is known as the means test.
Do you need an attorney?
While not mandatory, you should consider talking to an attorney about Chapter 7 bankruptcy. Your lawyer can help you with the paperwork and determine how you can save some of your assets. Your attorney can also negotiate better with your creditors and handle the process for you, which can be a huge relief.
The whole process of Chapter 7 bankruptcy can be completed within a few months. Talk to your attorney if you believe that your debts are beyond your control.
