How Do You File Chapter 7 Bankruptcy

Chapter 7 can be a financial life saver, especially

, for very huge debts. The power of eliminating almost all your debts can be so hard to resist that often most people file for a chapter 7 without even qualifying for it in the first place. It can be hard for a person to pursue the judge if he has an income that exceeds his expense. The truth is, chapter 7 is not for everyone so how do you know if you can file a chapter 7 and how do you file chapter 7 bankruptcy?

Let us take a look first at what is chapter 7. The idea behind chapter 7 is that your debts will be discharged in exchange that all your properties will be liquidated. Exempt properties are assets that are not liquidated and these are the things that you can keep which are stated in the bankruptcy law. All other debts that cannot be covered by the proceeds of the liquidation are considered forgiven or eliminated. In order to qualify for a chapter 7, you must have an income that is considered below average according to your state. You also have to pass a means test. This test is to prove that you do not have any means to repay your debts which will make you eligible in filing for a bankruptcy chapter 7.

If you are currently in a chapter 13 type of bankruptcy and cannot continue to provide payment for the repayment plan because of events that might have affected your income capacity to pay, then you can certainly change from a chapter 13 type of bankruptcy to chapter 7. Another factor that can affect your filing of chapter 7 is that if you previously filed a bankruptcy before and you are in the time period of 4 to 8 years, in which you have to wait for the time where your bankruptcy would be discharged; until then you would not be able to file bankruptcy.

Keep in mind that you can only file for bankruptcy if it is only the last option you have, otherwise, do not go through it. Bankruptcy has some negative effects after you filed it. This can have a huge red mark on your credit report which will make it tough to find new credit. Also, bankruptcy can affect your future employment and other opportunities that are related to finance.

How do you file chapter 7 bankruptcy without spending much money? Filing for chapter 7 is cheaper than the cost it would take you to file a chapter 13 but there are still ways that you can lessen the cost. The first is to search online for bankruptcy sites that offer services of selling bankruptcy forms. This is a pretty neat way to make it fast and convenient for you; bankruptcy forms are in PDF format which you can download. Another way that I can suggest is by hiring a petition preparer or a bankruptcy lawyer to prepare your papers then the rest of the work can be done by you. This helps you avoid making any mistakes in your documents that can cost you to lose more assets than required and this does not cost a lot of money. For more information on how to file bankruptcy, visit the link below.

by: Steve

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