Chapter 7 Bankruptcy: Can You File?
Before you plan to file for Chapter 7 bankruptcy, make sure you are eligible. Then make sure it the best move for your situation.
This type of action requires that your income be below a certain level. Every state has a different number depending on the cost of living, but in general you have to have an income below the state average. Of course, if you do not have income at all, you will likely qualify for Chapter 7 bankruptcy. If you are considered middle class or above, though, you should talk to an attorney to find out if you are eligible. If you make too much money, you can usually still file, but you would have to use Chapter 13 so you could pay back some creditors.
You should also make sure you do not have many assets to lose. With Chapter 7 bankruptcy, you can usually only keep your house if you do not have much equity in it. You can typically only keep one car unless your family needs two to get to work. It cannot typically be a very nice car since you will have to sell it if it is. In fact, most unnecessary assets will need to be sold so the trustee can turn over the money to your creditors. This is why this option is usually only best for people who have few assets since they have little to lose, except their debt.
Finally, make sure the debts you have would be wiped out by Chapter 7 bankruptcy. If your only debt is recent taxes or a student loan bill, this option may not help since you will not typically be able to get rid of these bills through bankruptcy. If you cannot pay them, you may have to work out an agreement, or talk to an attorney if you feel there are extenuating circumstances. However, if you have medical bills or owe a lot on credit cards, this option is probably best for you since it will wipe out such debts.
You should schedule an initial consultation with a lawyer to make sure you are not only eligible for this decision, but that it is the right move for you. If it is not, you may have other options that your lawyer can help you explore.
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ABOUT THE AUTHOR
Before filing for Chapter 7 bankruptcy Detroit residents should speak with an experienced attorney about their qualifications and options. For trusted legal counsel in the area, visit http://www.go4bankruptcy.com.