Chapter 7 bankruptcy is often a great solution for people who are struggling to find a way out of debt. People that eventually file for Chapter 7 bankruptcy protection rarely have to give up any of their possessions while offloading most, if not all, of their unsecured debt.
However, filing Chapter 7 bankruptcy is not a decision you should take too lightly. Just so you get a better idea of what you may be getting into, here are some of the most important things to know prior to filing Chapter 7 bankruptcy.
Top 5 Things to Know Before Filing Chapter 7 Bankruptcy
- Not Everyone Is Eligible – Most people with debt troubles will qualify for Chapter 7 bankruptcy without a problem, but there are a few who may be denied. For example, if you’ve previously filed bankruptcy in the last six years, or are more qualified for a Chapter 13 restructuring plan, then your petition for Chapter 7 could be denied.
- Automatic Stay – The automatic stay is one of the best parts about filing Chapter 7 bankruptcy. The moment you file your petition, the automatic stay should put a cease and desist order on all collection, repossession and foreclosure actions taken against you. That means you could stop creditor harassment over the phone, the repossession of your car, or the bank foreclosing on your house as soon as you file.
- Chapter 7 Exemptions – As mentioned earlier, most people who file for Chapter 7 bankruptcy are able to keep all of their possessions. That’s because there are a ton of federal and state exemptions that can be used to protect your property from the bankruptcy trustee. Talk to a bankruptcy attorney about what exemptions may be available to you.
- Student Loan Debt – Unfortunately, student loan debt is almost always nondischargeable. In cases where extreme hardship can be proven, the court may allow for the student loan debt to be discharged, but those cases are rare.
- Bankruptcy Law – Bankruptcy law is intentionally wordy and complicated, meaning that hiring a bankruptcy attorney is highly advisable. Hiring a bankruptcy lawyer will help you to get the best deal out of your bankruptcy discharge, because attorneys are adept at utilizing every available exemption and finding loopholes to get as much of your debt discharged as possible.
The Monmouth County bankruptcy attorneys at Garland & Mason, L.L.C. are here to help you achieve your goal of becoming debt free. Contact us now for a free consultation.