Filing for bankruptcy within the U.S. courts offers solutions to those people who are silently suffering through their debt. Burdensome debt is not only a financial problem. It can also lead to health problems by people stressing over garnishments, foreclosure, and lawsuits.
One of the types of bankruptcy is known as Chapter 7 bankruptcy as it draws on the United States Bankruptcy Code. A Chapter 7 bankruptcy can offer considerable debt relief.
This form of bankruptcy was configured for reducing unsecured debt. Some examples include: medical bills, credit cards, and personal loans.
Chapter 7 includes several protections. Both programs are part of the bankruptcy code in every state, to help people protect their homes, cars, wages, and other vital property from their lenders. These programs are also for avoiding foreclosure.
If the following describe your situation, then Chapter 7 may be for you:
* Most of your debt is from credit cards or medical expenses.
Chapter 7 is ideal for individuals burdened by job loss, medical bills, and credit card debt. It will usually be fast-acting, and you will not have to wait years for a fresh start. It still has a number of steps and stages though, and each involves completion of filings, processes, and meetings.
* You do not have much of an income.
To qualify for this type of bankruptcy, your income has to be low enough to pass the bankruptcy means test, which is a formula intended to keep those with higher incomes from filing for Chapter 7 when they should be filing for Chapter 13. It is not really like an exam in school.
If your monthly income is less than the median income for families of your size in the state where you live, then you pass the test and you can file for Chapter 7. However, if your income is greater than the state mean, the means test computations are more complex. A lot of it will depend on how much income you have after expenses.
Search the Internet for an online means test calculator to see if you might qualify. A local bankruptcy lawyer can also help you out. If you qualify, you may also have to enroll in a credit counseling course.
* You don?t have a lot of property.
The property protections under Chapter 7 vary from one state to another, but generally, Chapter 7 gives less protection for property than chapter 13 does. If you file for Chapter 7, your house and car may be exempt. You should consult a Las Vegas bankruptcy attorney.
What have just been discussed are the basics. They will help you find out whether Chapter 7 bankruptcies are suitable for your needs.
Source: http://www.free-money-finance.com/debt-management/essential-info-about-personal-bankruptcy/
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