Do You Know What it Takes to File Chapter 7 Bankruptcy?

Alabama bankruptcy lawyer

Every year, more than 1.5 billion people file for bankruptcy, according to US bankruptcy court statistics. Making the move to file chapter 7 bankruptcy is a big decision that should not be taken lightly. Chapter 7 completely wipes out your debts so you can basically start over again. The trustee collects your assets and sells the ones that are not exempt. Some examples that are exempt from being sold include, but are not limited to:

  • Property less than $5,0000
  • Annuity proceeds to $250 a month
  • Life insurance proceeds
  • Pensions of judge, law enforcement officers, teachers
  • Books, burial plots, clothing, family portraits

This list is not all inclusive, which is why it is important to contact a law firm as soon as you start to consider filing bankruptcy.

Is Filing Bankruptcy Right for You?
If your average monthly income for six months prior to filing is less than or equal to the state’s medium income, you may be eligible for chapter 7 bankruptcy. The two main choices between bankruptcy options include chapter 7 and chapter 13. It may be best to file for chapter 7 bankruptcy if you cannot afford to repay creditors for three or five years under the Chapter 13 bankruptcy plan. It is best to contact a lawyer to determine your eligibility and your options when taking these two choices into consideration.

Once you contact a law firm, a bankruptcy lawyer will be assigned to your case. Chapter 7 bankruptcy will discharge your debts with the condition you give up your property, except that which is under the exempt status. Bankruptcy may or may not affect your credit, depending on how bad your credit was before filing for bankruptcy. It does appear on your record for ten years, so that is important to keep in mind. Yet, once your old debt is taken care of, you may be in a better position to pay current bills and build your credit back up.

How a Lawyer Can Help You
A bankruptcy lawyer will help you navigate the bankruptcy process as well as help you understand your legal options. The lawyer will help you make an informed choice based on what your current situation is and how much debt your are in. Bankruptcy lawyers have handled many cases of varying difficulty, so they are sure to help you fix your finances and eliminate the stress of debt that has been following you for years.

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