Latest Important Tips For Chapter 7 Bankruptcy Requirements
By Jeffrey Paulsen on March 14, 2010, 6:00 am Posted in Finance NewsAfter the ‘Means Test’ was introduced several years ago people have become somewhat confused about Chapter 7. In previous years most anyone could apply for this chapter and many of their debts could be erased. Now, however, with the Means Test, this may not be the case. Some people are directed to Chapter 13 which requires a monthly payback plan over a period of a few years.
Be Prepared So You Do Not Lose Your Car In Chapter 7 Bankruptcy
People wanting to file for Chapter 7 should be prepared, before doing so, in order to be able to save the things they hope to keep. If you have some valuable items in your possession then your creditors might be interested in pursuing such. In a non-asset case, of course, this is irrelevant. However, if you own a nice car that has been fully paid, then your car might be sold in order to help pay part of your debt. If you still owe a lot of money on the car then this debt can be discharged during Chapter 7 proceedings. If you do not continue your payments, however, the dealership can repossess your car.
Talk With Your Lawyer So You Do Not Lose Your House In Bankruptcy
Your home is another major consideration if you are a homeowner. Many states offer some type of a homestead exemption. This protects your home in case of bankruptcy. However, this exemption amount can have a low limit, depending on the state in which it is located. For example, if your home is worth $250,000 and your exemption is $50,000 your house could be sold. Although the remaining $200,000 would be yours it would be used by the court to pay off your other debts.
Related posts:
- What Are The New Chapter 7 Bankruptcy Laws In Today’s Economy
- What’s The Latest Chapter 13 Bankruptcy Information?
- What Happens When You File Bankruptcy Made Easy
- What Is Chapter 11 Bankruptcy And How Does It Work?
- Should I Declare Bankruptcy If I Own A Home?
If you are considering bankruptcy, you really should look for other alternatives out there before you go the BK route. While the attorneys will probably tell you it’s an easy, cheap process and you’ll get Chapter 7 approved, the reality is that it’s very expensive, requires lots of upfront money, and it’s now extremely hard to get Chapter 7 from the courts. Instead, you’ll probably end up in Chapter 13 which can cost you a lot more money than expected, and you have all of the negative effects of the BK on your credit report for up to 10 years! There are alternatives that can help keep you out of bankruptcy, but you must qualify first, the programs are not for everyone.