About Filing Bankruptcy under Chapter 7
When debt becomes too much! A person owes more money than can be repaid in a reasonable period of time. Then Chapter 7 bankruptcy may be the best and only solution. Chapter 7 is complete bankruptcy. Also known as “fresh start” or liquidation bankruptcy. Some of the major causes of being bankrupt or insolvent are:
- loss of employment
- reduction of income
- adjustable rate mortgage goes beyond control
- creditor harassment
- high medical bills
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Being unable to pay the bills as they come due on a regular basis. Or, not being able to pay debts off within any reasonable period of time. Are also both indications of being bankrupt. If either of these two conditions exist, speak to a bankruptcy attorney about chapter 7 bankruptcy.
Chapter 7 Bankruptcy and Other Debt Relief Options
No matter what causes a person to consider debt relief options, professional legal counsel from a bankruptcy attorney is advisable. Of course chapter 7 bankruptcy is not the only option, there are a many programs that are popular and known as “debt relief solutions”. Some of these are good honest and effective debt solutions. Some are not. Some of these are quite costly and do little to solve a person’s overall debt problems. Before deciding on a solution, consult with a Chattanooga debt relief attorney about chapter 7 bankruptcy. Chapter 7 is usually the only complete and total debt relief option.
What Bankruptcy Options Are Available?
For an individual (or married couple) consumer that is insolvent there are two (2) options provided under the Federal Bankruptcy Code: Chapter 7 and Chapter 13. Both of these options entail requirements that must be met prior to filing for bankruptcy. For instance, you must attend an approved Pre-bankruptcy Credit Counseling Interview (in person, phone or internet options available). The debtor must also meet certain income and expense qualifications by passing a bankruptcy means test. For the specific bankruptcy qualifications you should consult with a bankruptcy lawyer.
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What are the Benefits of Chapter 7 Bankruptcy?
A Chapter 7 bankruptcy is also known as a liquidation bankruptcy. When filing bankruptcy Chapter 7, the debtor’s property is subject to scrutiny and possible liquidation by the Chapter 7 Trustee. The trustee may liquidate or sell any asset which is not exempt or encumbered by a security lien (home mortgage, car loan, etc.). Then use the proceeds of sale to pay the unsecured creditors – credit cards, personal loans, medical bills, etc. This does not mean that the debtor will lose all of his/her property in a chapter 7 bankruptcy. This is an issue that needs to be discussed in detail with the lawyer.
There are certain bankruptcy exemptions available under State Law, and/or Federal law, which allow a chapter 7 bankruptcy debtor to keep certain property up to certain exemption values. For instance, under current Tennessee law most types of personal property are exempt up to a total of $10,000.00 per individual bankruptcy Debtor. There are also exemptions for clothing, books, and of course limited exemptions for the homestead (primary residence). Speak to an experienced Chattanooga bankruptcy attorney about specific assets and what property may be exempt. Be sure to tell the lawyer for bankruptcy about all property.
Complete Erasure of Unsecured Debt in Chapter 7 Bankruptcy
Discharge, cancel debts. Chapter 7 bankruptcy is also called complete bankruptcy. A person can have all unsecured debt (credit cards, personal loans, medical bills, etc.) discharged – wiped out, erased – forever. The debtor may also choose to surrender their house back to the mortgage company. Then any deficiency (difference in sales price and mortgage balance) is discharged. In fact, a chapter 7 bankruptcy filer can surrender any secured asset (car, boat, motorcycle). The secured debt is discharged. So if a person is upside down in his/her car, this is a good time to get rid of it. Or, under certain circumstances, a chapter 7 bankruptcy debtor may choose to reaffirm such “secured” debts. Of course, the account would need to be current and in good standing with that particular creditor. Because the lender must agree to allow a person to reaffirm the loan. That is, the debtor, may be able to “take the loan out of bankruptcy” and affirm the original promise to pay. Then continue the original contract. The bankruptcy attorney will thoroughly discuss reaffirmation of debts. The debtor and the chapter 7 bankruptcy attorney are required to sign a statement that a reaffirmation agreement will not cause an undue financial hardship.
Seek Legal Advice from a Chapter 7 Bankruptcy Attorney
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Obviously, an internet site can not answer all questions about chapter 7 bankruptcy. Nor determine if it is the right debt relief solution in a given situation. Contact a Chattanooga bankruptcy attorney for a complete review of your situation. And get legal advice from a seasoned legal professional, an experienced lawyer in Chattanooga, TN. Bankruptcy chapter 7 provides complete debt relief, with some exceptions. But the bankruptcy process is complicated. A debtor must disclose all debts in a bankruptcy petition. Including debts owed to family members or friends. Full disclosure of all income, and assets to the bankruptcy court is absolutely required. Failure to disclose all relevant information in a chapter 7 bankruptcy petition could result in criminal charges. This is why having an attorney is vitally important. The lawyer will make sure that your petition for chapter 7 is accurate and correctly filed. Contact Purple Law Firm to schedule a consultation appointment about filing chapter 7 bankruptcy.
Chattanooga bankruptcy attorneys serving Chapter 7 Bankruptcy clients in Hamilton, Rhea, Bradley, Marion, and Sequatchie County, Tennessee.