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Chapter 7 Bankruptcy – 7 Essential Things to Know

Thinking of getting a discharge by filing for a Chapter 7 bankruptcy? The information here might be useful.

1. The Means Test

To qualify for filing a Chapter 7 bankruptcy case, you have to first pass the Means Test. This test takes note of your debt, income, expenses, and other factors to determine your edibility.

2. Not all your assets are at risk

Not all your assets will get sold off when you get a discharge. A lot of your personal property can be exempted. Depending on your local state laws, it can even be your car or primary residence.

3. Your location matters

Laws regarding exemption, as well as your overall eligibility for a discharge under chapter 7 bankruptcy, will vary widely by state. And, so would the attorney and filing fees.

4. Not all debts qualify for a discharge

Certain debts such as from your student loans, back taxes, alimony, and child support are not eligible for a discharge under Chapter 7 bankruptcy.

5. Chapter 7 bankruptcy is not cheap

Depending on your state, costs (including attorney fees) of filing for a Chapter 7 bankruptcy can run anywhere between $1,200 to $2,500.

6. It might not make your credit worse

While it certainly goes on your credit history, it might not actually make it worse. Creditors are more willing to lend to a person free of debt than to one struggling with a mountain of it.

7. Hiring a professional attorney really helps

While you can file without an attorney, hiring one can help you more easily navigate through the process and stir the bankruptcy outcome more in your favor. You don’t just want a discharge; you want to keep your house and your car. #chapter7 #bankrutcy #Tips #FYI