Tuesday 4 June 2013

What is the Process of Filing Chapter 7 Bankruptcy Cases?

The recent financial meltdown has left many people in a financial mess. Job cuts and pay cuts have further complicated situations for many people. In such a situation you might be consider filing bankruptcy to get rid of your woes. However filing bankruptcy is the last ditch effort for anyone looking to get out of a financial mess. Before you opt for this you should try out all other repayment options. In the United States there are different chapters under which one can file bankruptcy. Among these chapters, Chapter 7 which is also known as the ‘straight bankruptcy’ is the most preferred one. Here in this short write-up we shall take a look at the basic procedure of filing Chapter 7 bankruptcy cases.

  • To start with you need to hire the services of a professional attorney who specializes in bankruptcy related cases. You can do some research on the Internet or ask for reference from your friends and colleagues. The attorney will guide you through the different stages of filing apart from trying to work out the case in your favor.
  • Along with your attorney you will need to analyze some debts, such as child support obligations as these are not dischargeable in Chapter 7 bankruptcy. If you pledged collateral for a debt your creditor can take the property if the debt isn't paid.
  • Know if you qualify for Chapter 7 bankruptcy. You will have to take the ‘Means Test’ that is based on your income and family size in relation to the mean income of the state you reside in. The mean income is revised on a regular basis and your attorney will guide you on that. In case you fail the Means Test you shall have to choose Chapter 13.
  • If you qualify for Chapter 7 bankruptcy filing you will need to undergo Credit Counseling. You must get credit counseling from a government-approved organization. This has to be done within 180 days before you file. This is very important as without debtor education course your case is likely to be dismissed before you obtain a discharge.

  • Along with the bankruptcy petition you will also need to file a schedule of assets and liabilities, current income and expenditures. All kinds of debts need to be included here. Keep in mind that the petition and other documents need to be filed in the State where you live or where you own a business or have most of your assets depending on your case.
  • Once the petition has been filed the court grants you an automatic stay and this prevents your creditors from filing lawsuits, garnish wages or contact you demanding their dues. This temporarily relieves you from your creditors.

Filing for bankruptcy under Chapter 7 can affect your credit score adversely and your attorney will explain to you these in details. Do not compromise on the choice of attorney as this will ensure you get maximum relief in terms of repayment and right to your assets while filing for bankruptcy.

Attorneyforbankruptcy.com is a leading law firm of California where you can hire most experienced san jose chapter 7 bankruptcy lawyer and tax relief lawyers.

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