Chapter 7 Bankruptcy

One of the major differences between Chapter 7 and Chapter 13 bankruptcy is that in Chapter 7, there is not a requirement to file a repayment plan like there is in Chapter 13. If you're bankruptcy lawyer helps you determine that Chapter 7 is right for you, plan to be assigned a trustee who will help dispose of your assets to help satisfy your creditors. The trustee will then place these assets in escrow and satisfy the different creditors in order of their priority.

Many people do not know this, but when you file for bankruptcy, you can still keep some of your personal property. A common exempt piece of property is your personal residence, often you can stay in your house even after you have declared bankruptcy.

To qualify for Chapter 7, you must subject yourself to the "means test" which helps determine if your income level is below the average. The "means test" is state specific so if you live in North Dakota you will have to make much less than if you live in New York to qualify for Chapter 7 under the means test.

You are also required to receive credit counseling 180 days before filing for bankruptcy. Failure to receive credit counseling could cause you to be unable to file for bankruptcy and to receive all the protection it affords. The main reason most people go for a Chapter 7 bankruptcy is so that they can literally start the next chapter in their life. Filing for bankruptcy stops the annoying calls and helps you get a piece of mind so you can get your life back in order. Not all debts can necessarily be discharged, but many of them will be so you can focus on what matters in life.