Bankruptcy comes in two forms for most debtors, Chapter 7 and Chapter 13. Chapter 7 is the preferred type of case to file because it allows a debtor to get rid of all of their unsecured debt. And, in most cases, it is having too much unsecured debt that puts people in the position to need the relief bankruptcy can provide. But before you decide to file a case and count on being able to file a Chapter 7, there are some points of interest to learn.
In order to qualify for a Chapter 7 bankruptcy you have to submit your income and debt information for review. The amount of secured debts you have will be compared to the amount of income you bring in, and if your income shows no ability to repay any of your unsecured debts after making secured debt payments each month, you will be allowed to file a Chapter 7. Here are some of the key components of Chapter 7 cases:
- All unsecured debt is eliminated, in full. That means you no longer have to pay credit cards, signature loans, and medical bills.
- Debts for things you want to keep, like your house and car, have to be repaid if you do not want the lender to ask for permission to repossess the item. In most instances the continued payments are made pursuant to a reaffirmation agreement, and that means the debt will still be due after your case is over. If you miss a payment, you can be sued for the debt.
- The timeline to complete a Chapter 7 bankruptcy is around 3 to 6 months. This relatively short timeframe is an incentive for most people, as they prefer not to be involved in a bankruptcy proceeding for too long.
Getting out of debt, at least unsecured debt, by filing a Chapter 7 helps thousands of people each year. If you have more debts than you have income, come in and talk to us about your bankruptcy options. We will take a look at the numbers and let you know what type of case you can file and how it will help you become more financially secure.
For answers to your questions about debt, contact us at www.DsouzaLegalGroup.com.