Chapter 7 Bankruptcy
If you are facing serious financial hardship, you may consider filing a petition for chapter 7 bankruptcy – to most common form of bankruptcy filed in the United States. In the past year, more than 1.3 million people have petitioned for some form of bankruptcy. Of these petitions, 958,757 were filed under the chapter 7 consumer protection law. Also known as "liquidation" or "straight" bankruptcy, chapter 7 filing helps consumers avoid creditor abuse and gives them a fresh financial start. Before filing a petition, though, make sure that chapter 7 bankruptcy is right for you.
Should you file a petition?
Every year, people file unnecessary bankruptcies. Don't be one of them. Before you officially petition, make sure that you can't find a better financial solution. For instance, are you making unnecessary expenditures that would otherwise allow you to pay off your outstanding debts? If so, you may not need to file. Also, make sure you understand each bankruptcy chapter. Have you considered filing chapter 13 bankruptcy? Unlike chapter 7, chapter 13 allows you to re-negotiate you debt and establish a payment plan instead of liquidating your assets to eliminate your debt.
Qualifying
Before officially filing a petition, make sure that you qualify. In order to qualify for chapter 7, your income must be less than the median household income in your residential area. In 2009, the median income in Las Vegas was approximately $52,000. Under special circumstances, you may be eligible for chapter 7 bankruptcy if your income is above the median. For instance, if your disposable income falls below the median income after high, monthly expenses are eliminated from your budge, your petition for chapter 7 may be accepted. Generally speaking, more less money you have in your disposable income, the more likely you are to qualify.
In Nevada, if your disposable income is more than $10,000, you will not qualify for chapter 7 bankruptcy. If this is the case, you may be eligible for chapter 13. Like chapter 7, chapter 13 enacts an automatic stay. Automatic stay prohibits debt collectors from attempting to collect payment and protects you from creditor harassment. If a creditor continues to harass you after you have filed for any chapter of bankruptcy, contact an attorney from The Price Law Group immediately – your situation may merit legal action.
In most cases, filing for chapter 7 serves as an effective form off foreclosure prevention. In short, chapter 7 bankruptcy law states that the consumer is allowed to keep all exempt property form being liquidated. Exemption regulations differ from state to state; generally speaking, your retirement savings, approved pensions, 401K and individual retirement accounts will not be liquidated. Remember: just because you qualify does not mean that you should file. Talk to an attorney from our firm to determine the best path for your financial security.
Researching Your Alternatives
If you aren't sure whether or not bankruptcy is right for you or you don't qualify, consider one of the following alternatives:
If bankruptcy isn't right for you, a loan modification may help eliminate your financial problems. A loan modification allows you to negotiate with your lender so that your debt payments are more manageable.
For instance, if you are having trouble paying for your mortgage, you lender may be willing to extend your loan so that your home can avoid foreclosure. Be wary of loan modification scams, though. Scammers may try to take advantage of debtors seeking bankruptcy alternatives. If you have questions about chapter 7 bankruptcy, talk to an attorney from the firm today. We are ready to help you make the best decision for your financial circumstances.