Chapter 7 Bankruptcy is a Practical Way Out of Debt!

Even though these debts are probably not dischargeable, all debts have to be listed on the bankruptcy schedule.

Unlike a chapter 13 bankruptcy, which will stay on an individual's credit report for 7 years from filing date of the petition for chapter 13, a Chapter 7 bankruptcy filing will stay on an individual's credit report for 10 years from the filing date of the petition for Chapter 7. Because of this, credit can become more difficult to obtain and/or terms on credit will often be less favorable, just as though the individual has a high credit to debt ratio. However, that should be balanced against the elimination of actual debt from the debtor’s credit record by the bankruptcy, which tends to increase creditworthiness. However, creditworthiness and consumer credit is a complicated subject. Further capacity to acquire credit is dependent on many factors and can be difficult to predict.

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Another item to take into account is whether the bankruptcy filer can avoid a challenge by the U.S. Trustee to his or her Chapter 7 bankruptcy filing as abusive. One factor in taking into consideration whether the U.S. Trustee can prevail in a challenge to the filer’s Chapter 7 bankruptcy filing is whether the filer can otherwise obtain the money needed to repay some or all of his or her debts out of disposable income in the five year period to do so provided by a Chapter 13 bankruptcy. In this case, the U.S. Trustee may be successful in preventing the filer from getting a discharge under Chapter 7, thereby forcing the filer into Chapter 13.

It is widely maintained amongst bankruptcy attorneys that the U.S. Trustee is becoming far more aggressive in recent years in going after (what the U.S. Trustee regards to be) abusive Chapter 7 bankruptcy filings. By means of these activities the United States Trustee has attained a regulatory system that most creditor-friendly commentators and Congress have consistently embraced, i.e., a formal Chapter 7 means test. The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 clarifies this area of concern by instituting changes to the U.S. Bankruptcy Code that incorporate, among many other reforms, language establishing a bankruptcy means test for Chapter 7 cases.

Creditworthiness and the probability of getting a Chapter 7 discharge are just two of several issues to be taken into account when deciding whether to file for bankruptcy. The significance of the effects of filing for bankruptcy on consumer credit and creditworthiness is sometimes overstated because by the time that most debtors are prepared to file for bankruptcy their credit score is probably already ruinous. Also, new lines of credit offered after the petition are not part of the bankruptcy discharge, so creditors often offer new credit lines to the newly-bankrupt.

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To determine if you are eligible for Filing Chapter 7 Bankruptcy, the bankruptcy attorney will complete several proceedings listing your assets, debt, income, and expenses, as well as other documents on your behalf. There is also a bankruptcy means test that evaluates your income compared to expenses and places a limit on those who can file based on their income. The amount of your debt is not a determining factor. There are limits placed on those that have filed for bankruptcy in the past and also a mandatory credit counseling class that must be completed before filing.

Chapter 7 bankruptcy offers debt relief to Americans in unsustainable financial situations, regardless of how they got there. Up to millions of people each year declare Chapter 7 bankruptcy. It can be especially useful for people who have a lot of unsecured debts like credit cards, medical bills, and personal loans.

In almost all Chapter 7 bankruptcy cases, an automatic stay begins immediately after starting the process, halting creditors and debt collectors in their tracks.

If this sounds like the type of help you’re interested in, just complete the short form below for a free telephone consultation with a bankruptcy lawyer near you.

Chapter 7 bankruptcy filing can be a complicated process with many items that should be taken into consideration including, among other items, the Chapter 7 bankruptcy means test. It is recommended that you obtain the advice of a bankruptcy attorney before you begin the bankruptcy filing process. Use the form above to arrange a free consultation with an expert bankruptcy attorney in your area.

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Some Chapter 7 Bankruptcy Areas of Consideration

People, who live in, have a place of business in, or own property in the United States may file a petition for bankruptcy in a United States federal court under Chapter 7 (commonly referred to as liquidation or straight bankruptcy). Chapter 7 bankruptcy, like other bankruptcy chapters, is not obtainable by people who’d had a bankruptcy case dismissed during the past 180 days.

The individual filing for a Chapter 7 bankruptcy is allowed to keep certain types of exempt property. In most cases, liens (such as home mortgages and car loans) survive. The amount of exempt property that can be claimed varies from state to state. Other assets, if any, are liquidated (sold) by the Chapter 7 bankruptcy trustee to repay creditors. Although many sorts of unsecured debt will be legally discharged by Chapter 7 bankruptcy information, there are still some types of debt that will not be discharged in a Chapter 7.

Common debts that will not be discharged in a Chapter 7 bankruptcy include:

• Income taxes less than 3 years old
• Back and future child support
• Student loans (unless the debtor prevails in a adversary proceeding brought to decide the discharge ability of the student loan)
• Property taxes
• Restitution and fines imposed by a court for any crimes perpetrated by the debtor.
• Spousal support
• Property settlement through a divorce