A bankruptcy can be used to get debt canceled or repay creditors, while providing filers with a fresh start in minimum time. An individual who has medical bills, credit card debt, or personal loans that need to be paid off, maybe because your median income is below your state’s defined income, can file for chapter 7. In order to qualify, you cannot previously have sought bankruptcy relief.
Seeking guidance from an bankruptcy attorney can help you receive a chapter 7 bankruptcy discharge in a timely and orderly manner.
Advantages of Chapter 7 Bankruptcy
If you are eligible to file a chapter 7 bankruptcy, it is likely you will be allowed to keep most of your assets – unlike a chapter 13 bankruptcy. A chapter 7 bankruptcy is a quick and effective ways to get rid of debts quickly. Some other benefits of chapter 7 filing include:
- It can three (3) to six (6) months for a chapter 7 bankruptcy to complete,
- There are no payment plans – unlike that in chapter 13 bankruptcy filing,
- Apart from non-dischargeable debts, almost all debts can be extinguished.
Exempt and Non-Exempt Assets
It is possible to save your house from foreclosure or give it up to repay debt if you have been paying your mortgage payments on time. Also, a house is secure from chapter 7 bankruptcy if a debtor has little equity left in their home or is debtor has repaid most of the mortgage payments due. However, a house will become non-exempt if an owner failed to pay monthly mortgage, and has enough equity left that can be used to repay debts. Other non-exempt assets include financial assets such as stocks, bonds, cash or bank accounts, a second vehicle, collectibles like coins and stamps, a second home and expensive household musical items.
Exempt assets that can be kept by a filer include a vehicle of certain value, clothing, household equipment and appliances, pension and life insurance, public benefits, tools for trade, and jewelry for personal use.
It is highly possible that a chapter 7 bankruptcy fails to provide relief from a variety of non-dischargeable debt. A non-dischargeable debt includes the following:
- Child support and spousal maintenance payments,
- Repayment of student loan, unless necessary,
- Repayment of past three-year income taxes,
- Payment to compensate for an injury or death,
- Payment of bad check or fraudulent payments,
- Debts due to divorce settlements,
- Debts due to unlawful activities.
If you wish to get more information about bankruptcy and how to file for bankruptcy, you can schedule a free consultation. Contact Jackson Abdalla Law Group at (773) 550-3853 to speak with an experienced bankruptcy lawyer.