When filing Chapter 7 bankruptcy might be the only option?

People that are deeply in debt often consider filing chapter 7 bankruptcy. This is one kind of legal procedure that can help people get a fresh start by eliminating debts. There are several different kinds of formats for this procedure and this kind may be appropriate for some people.

Why people may need this?

People may have been less than careful with using credit such as getting too many credit cards and overusing them. They may have gotten to a point where they can no longer keep up with payments. At other times, people may have the unexpected happen such as uninsured medical bills, job loss or long-term unemployment. There can be any number of reasons why this can happen to people and being in debt can happen to anyone.

Why this kind and not some other kind like Chapter 13?

The United States bankruptcy laws include several different kinds of actions that can be used to eliminate or restructure debt. Each kind is appropriate to specific kinds of debt, with Chapter 7 being possibly the most basic. It is used mostly for people that do not have a lot of assets and need debt relief because they cannot pay. Chapter 13 is more often used for people that have assets that they want to preserve such as a home, car or possibly other kinds of property. This category of bankruptcy allows people to restructure debt so that it can be paid off over time.

Way to tell who are appropriate for qualifying the “means” test

Laws about bankruptcy changed in 2005 and there are now standards that have to be used to determine which kind of proceeding needs to be used. If a person’s income is above the median in his or her state, Chapter 7 cannot be used. There are also requirements for people to obtain debt counseling prior to being granted a bankruptcy so that there is less likelihood of problems reoccurring.

Who to talk to?

While it is possible that people might attempt to do this procedure by representing themselves in court, it is extremely unwise. This legal proceeding has a lot of detail to it and laypersons are very likely to make errors – the kinds that can be costly in the long term as well as taking more time to resolve. The best thing to do is to consult with a legal firm that specializes in this kind of service. This will get the client on the road to fiscal recovery in the quickest and easiest manner.

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