Most people will find themselves in a financial bind at one time or another. Many times, this will lead to overwhelming amounts of debt. Sometimes it is possible to find a way to repay the debts owed. But there are other times when certain situations and circumstances will not allow for this to happen. This is when one may have to seek the assistance of any bankruptcy law firm birmingham al in your area.
What is Chapter 7 bankruptcy?
One possible option that may be available is filing a Chapter 7 bankruptcy. In this type of bankruptcy, one may be able to cancel many or possibly all of one’s debts. However, the bankruptcy trustee may also be allowed to liquidate some personal property in order to repay creditors. Most unsecured debts will allowed to be discharged through a Chapter 7 bankruptcy.
Costs for Chapter 7 bankruptcy
The entire process in a Chapter 7 bankruptcy may take anywhere from four to six months. There are $335 in fees for filing and administration. Usually, a Chapter 7 bankruptcy will only require one trip to court. Additionally, credit counseling with an approved agency will be required. The agency must be approved by the U.S. Trustee.
Who qualifies for Chapter 7 bankruptcy?
It is also important to understand the rules for qualifying for a Chapter 7 bankruptcy. If a person has obtained a bankruptcy discharge within the previous six to eight years, he or she may not be able to file a Chapter 7 bankruptcy. However, this may depend upon the type of bankruptcy filed previously.
Also, the court will look at a person’s income, debt burden and expenses in order to determine whether or not he or she could feasibly repay the debts. If the court determines this to be the case, the court may deny a Chapter 7 filing and instead start a Chapter 13 bankruptcy process. This means the court will restructure one’s debt into a repayment plan that is more feasible based upon one’s particular financial situation.
Legal forms required for Chapter 7 bankruptcy
In order to file a Chapter 7 bankruptcy, one will need to complete a petition as well as various other legal forms. He or she will then have to file the forms with a local bankruptcy court. Essentially, the forms will request a description of the property one owns, current monthly income and one’s current monthly living expenses. One will also have to provide the debts owed.
He or she will also be able to list the property one claims the law allows he or she to keep through a Chapter 7 bankruptcy. These property items are known as “exempt property.” What is considered exempt property will vary from state to state.
The legal forms submitted to the court will also ask for a listing of property one owned as well as the money spent during the last two years. One will also have to disclose property sold during this time frame. Property one has given away will also need to be disclosed in the various legal forms submitted to the court.