Understanding Chapter 7 bankruptcy can help you make an informed decision about whether filing is the best option for your situation. Getting answers to questions you may have about the process can be an important factor in choosing how to move forward with your finances. It’s an opportunity to learn the facts while clearing up misconceptions about how the process works. While the following questions may help shed light on basic details, talking with an experienced bankruptcy attorney should help you learn other aspects about the process.
- What is Chapter 7 bankruptcy? Chapter 7 helps eliminate or wipe out debt, giving debtors a fresh start. Most who file this chapter are able to keep personal property through exemptions. The process can also help debtors liquidate assets to repay creditors.
- Is it true it’s harder to qualify for Chapter 7 bankruptcy? In 2005 revisions were made to bankruptcy laws in an effort to improve the process for both debtors and creditors. While the criteria for eligibility include different factors, debtors can easily learn if they qualify by reviewing their situations with a bankruptcy expert.
- Can the process wipe out all of my debt? Most types of unsecured debt can be eliminated, yet certain debts such as back child support, student loans and certain income tax debt are not eligible for discharge.
- Can I keep my house in Chapter 7 bankruptcy? Most debtors can keep their home including equity through state and federal exemptions.
- Do I have to give up personal property to pay creditors if I don’t own a home? In Chapter 7 there are a number of exemptions that keep property such as jewelry, retirement funds, and household goods from creditors. In many cases debtors keep their personal property due to the vast amount of exemptions available.