About four years ago, I could tell that things were turning south with my business. Cash flow was tight, and customers simply weren't coming back to shop some more. I realized that if I was going to keep my house, I would need to do something to resolve my finances. Although it was scary, I decided to meet with a bankruptcy attorney. After I explained my situation, he helped me to understand the process and how to tell if it was a good idea or not. When I decided to do it, things started changing for me right away. This blog breaks down bankruptcy in layman's terms, so that you can decide whether or not it is right for you.
Being in debt can be stressful. Not only are you worried about paying your bills on time, but you must deal with the constant hounding of creditors and debt collectors. Chapter 7 bankruptcy could be a good way to give yourself a fresh financial start.
In order to understand how a Chapter 7 bankruptcy filing service can benefit you, it's essential that you understand the basic premises of this type of legal action.
Qualification
Not everyone will qualify to file a Chapter 7 bankruptcy petition. The first step in determining whether or not a Chapter 7 filing will benefit you is to determine if you are eligible for this type of bankruptcy. Your monthly income must fall below the median amount to qualify for a Chapter 7 bankruptcy.
If your income is higher than the median, you can still qualify if you pass the means test. A means test looks at your disposable income. If you have enough disposable income to repay some of your debts within the next few years, you will need to file a Chapter 13 bankruptcy instead. If your disposable income is limited due to high living expenses, then you could still qualify for a Chapter 7 filing.
Automatic Stay
Once you have filed your Chapter 7 bankruptcy petition with the court, an automatic stay is issued on your behalf. This stay puts a stop to all collection activities be creditors and debt collectors.
You will be able to enjoy a respite from the barrage of telephone calls that can act as a source of stress. Creditor and debt collectors face stiff penalties if they contact you while an automatic stay is in place, so you can feel confident in your newfound peace.
Exempt Property
You may be worried that you will lose all of your belongings if you file for Chapter 7 bankruptcy. Bankruptcy law is designed to provide some protection for debtors and their belongings. There are exemptions that apply to your personal property that will prevent the property from being seized during the course of your bankruptcy.
You can protect the equity built within your home, your household goods, and some of your jewelry. The exemption values allowed vary from one jurisdiction to another, so you need to work closely with your attorney to determine which assets you will exempt from bankruptcy proceedings.
Understanding Chapter 7 bankruptcy allows you to better determine if filing this type of bankruptcy can help you regain your financial footing in the future.
Share21 October 2018
