Considering Chapter 7 Bankruptcy? Common Questions About How It Works
Has your financial situation led to the need to file for bankruptcy? If so, you likely have a few questions about it before you start the process.
What Is The Initial Consultation With A Bankruptcy Lawyer Like?
The first step that you need to take is to meet with a bankruptcy lawyer for a consultation. They are going to take a look at your finances and let you know if they recommend bankruptcy to fix your financial situation. You may be nervous about a bankruptcy consultation but leave the meeting with a feeling with relief that there is a solution to your financial problems. Knowing that there is a light at the end of the tunnel can help you feel like there is a way out of debt.
What Are The First Steps To Take To Use Chapter 7 Bankruptcy?
Your bankruptcy lawyer is going to see if you qualify to use Chapter 7 bankruptcy, which will be based on your current income levels. Then they will find out what assets you have that are valuable and if they can be exempted from the bankruptcy filing. For example, you likely have a vehicle that you will want to hold onto.
There are allowances for certain exemptions, and you will need to figure out if all the assets you want to keep will qualify. If you are honest with your bankruptcy lawyer and let them know of all the assets that you own, your lawyer will take the necessary steps to help you keep the assets. Problems often come up when other people have put assets in your name and you are not aware of it, such as a co-owner of a bank account.
What Debts Can And Cannot Be Discharged?
The most common debt to discharge with Chapter 7 bankruptcy is credit card debt. Many people also discharge unsecured loans as well. The major items that cannot be discharged are student loans, late taxes, and support payments for a former spouse or child.
It is also possible to reaffirm some of your debts if you need to keep the asset associated with it. This makes it so that you are still obligated to repay the debt, which lets you keep the item. A common reason to reaffirm a debt is if you are keeping an item that you need to make money. For example, if you have a car that you use for driving for a ride share service, you may need to reaffirm that debt.
Reach out to a bankruptcy attorney for more information.
