What is Chapter 7 Bankruptcy?
Chapter 7 bankruptcy provides relief to people who have accumulated large of amounts debt but cannot afford to pay it off. Through Chapter 7, a person can get the majority of their non-secured debt eliminated completely. Once the bankruptcy process is complete, the debtor will not be responsible for repaying creditors for the debt that was discharged.
It should be said that not all types of debts can be eliminated, or discharged, through Chapter 7. Debts from child support, spousal support, student loans, taxes, or court-imposed fines, fees, or penalties are all examples of debt that cannot be discharged in a Chapter 7 bankruptcy case.
Qualifying for Chapter 7
Not all debtors will qualify for Chapter 7 bankruptcy. To determine if you qualify you must first take the Means Test. This test was established as part of the new bankruptcy laws that took effect in 2005. Before these laws were passed everyone wanted to file for Chapter 7 as opposed to Chapter 13 because it completely eliminates most unsecured debt. This test prevents people who can afford to repay their debt from taking the easy way out, and instead encourages them to pay back their debt over the course of three to five years through a Chapter 13 repayment plan.
If you are considering filing for bankruptcy, contact the Malaise Law Firm and ask to speak with an experienced Fort Worth bankruptcy attorney. We can help you decide if Chapter 7 is the best option for you, as well as help you take advantage of other solutions if you do not qualify for Chapter 7. To arrange your free consultation, please call (800) BANKRUPT today!