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Every person’s situation is unique, and please meet with a bankruptcy attorney in your state to insure that chapter 7 bankruptcy is applicable to your personal situation. The following information is provided for educational purposes only.

What does Chapter 7 bankruptcy involve?

Chapter 7 is a type of bankruptcy where your debts are essentially wiped away, in exchange for your nonexempt property. This is unlike a chapter 13 bankruptcy filing, where the debtor follows a court-approved debt repayment plan. Straight bankruptcy under Chapter 7 allows you to discharge (eliminate) most debts.

Am I eligible to file for bankruptcy under Chapter 7?

Before the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, anyone can file for bankruptcy under Chapter 7. Today, you are eligible only if you earn less than the median income in your state, or if you pass a ‘means test’.

You are not eligible if you had filed for bankruptcy and were granted a discharge under Chapter 7 within the past eight years.

How does the means test work?

If you earn more than the median income in your state, the court employs a complex formula (deducting costs of food, rent, mortgage… etc., calculated under IRS guidelines) to ascertain if your monthly income is less than 0. You are eligible if it is less than 0.

If your monthly income is between 0-6, eligibility depends on the percentage of your unsecured debt that could be paid off by your income over a 5-year period.

If your monthly income is more than 6 per month, you are not eligible for Chapter 7.

What do I have to reveal?

When you file Chapter 7, you also must file a Statement of Financial Affairs and Schedules. This schedule must include a detailed description of your financial history, income, debts and assets. If you provide incorrect information, or omit some, you might not be discharged from your debts.

Will I lose some of my assets if I file for Chapter 7?

Under Chapter 7, you may have to hand over all of your nonexempt assets.

What are exempt assets?

Exempt assets are listed on your Statement of Financial Affairs and Schedules. Exemptions vary widely from state to each state. In a few states, you may choose either Federal or state laws, however in most states you may use only the state exemptions.

What are nonexempt assets?

Everything not specified above. The Bankruptcy Code requires that you turn over all nonexempt assets to the bankruptcy trustee. The trustee will then sell off these assets to pay off your creditors. However, in many cases, there are no assets left for unsecured creditors after the exempt assets have been claimed.

Can I use Chapter 7 bankruptcy to get rid of all my debts?

No, bankruptcy does not discharge all types of debt. You are still responsible for most tax claims, student loans, alimony, child support, all property settlement obligations from a divorce or separation, fraud debts, and debts from a drunk driving problem, etc.

Debts incurred through fraud are also non-dischargeable. A last minute credit card binge within sixty days before a bankruptcy filing is presumed to be fraud.

Bankruptcy Alternatives: CareOne Credit Providers is a BBB (Better Business Bureau) Accredited Credit Counselor since 2004. CuraDebt is a BBB (Better Business Bureau) Accredited Debt Settlement Company with an A+ rating.

How Will Debt Settlement Affect my Credit Report? http://articlesbase.com/debt-consolidation-articles/how-will-debt-settlement-affect-my-credit-report-2345991.html

 

Bankruptcy or Debt Negotiation — What is Better? http://articlesbase.com/debt-consolidation-articles/bankruptcy-or-debt-negotiation-what-is-better-2285788.html

 

Will Credit Card Debt Settlement Hurt Credit Score? http://articlesbase.com/debt-consolidation-articles/will-credit-card-debt-settlement-hurt-credit-score-2354634.html

How is the bankruptcy of auto makers will affect my decision of buying a new car?
I want to buy a new car but the everyday news talks a lot about the bankruptcy of some auto makers. I just wounder if I should wait till the end of the year or this kind of news have no much affect?


AnswerThe best time to buy a car is in the fall, when the new models come out….
However right now would be a great time to buy a new 2008, I’m sure the bigger dealers still have some that they want to get rid of…

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