Bankruptcy Information

When you declare bankruptcy, it's a sign that you are no longer paying your debts as originally agreed, and it can seriously damage your credit history.Because chapter 7 bankruptcy completely eliminates the debts you include when you file, it can stay on your credit report for up to 10 years.

After filing for Chapter 7, your property will go into a bankruptcy estate held by the Chapter 7 bankruptcy trustee appointed to your case. However, you don't lose everything because you can remove (exempt) property reasonably necessary to maintain a home and employment.

Even if you make too much money to automatically pass the Chapter 7 means test, you may still be able to qualify for Chapter 7 bankruptcy. This is because you can deduct certain expenses in full to help you reduce your disposable income on the means test.

You won't lose all of your property when you file for bankruptcy.Bankruptcy law allows you to exempt, or take out of the bankruptcy estate, the things you need to maintain a home and job, such as household furnishings, clothing, and an inexpensive car.

While you are bankrupt, you will not have to make payments on most of your debts unless you have surplus income. Your creditors will not be able to contact you about your debts. Any lawsuits about your debt will stop. Your assets are things that you own that can be sold to help pay off your debts.

In both cases, the bankruptcy court can discharge certain debts. Once a debt has been discharged, the creditor can no longer take action against the debtor, such as attempting to collect the debt or seize any collateral. Not all debts can be discharged, however, and some are very difficult to get discharged.

Filing Bankruptcy: The Cons The first downside to filing for bankruptcy is that despite helping you out of debt, it will not eliminate all your debts. The following are some of the debts that will remain after filing for bankruptcy: Your most recent back taxes. Most student loans.

If your annual income, as calculated on line 12b, is less than $84,952, you may qualify to file Chapter 7 bankruptcy. If it's greater than $84,952, you'll have to continue to Form 122A-2, which we'll review in the next section. It should be noted that every state has different median income calculations.

There is no minimum amount of debt you must have in order to file for bankruptcy relief. While the amount of your debt is an important factor to consider, there are other more important factors to take into account in determining if a bankruptcy filing is in your best interest.