If you have considered filing for Chapter 7 bankruptcy, you may have questions. It is for this reason that the team at Dion R. Hancock, P.A. has decided to answer some of the most frequently asked questions about this debt relief process.
Although Chapter 7 bankruptcy is a viable option for those who are struggling to get out of a dire financial situation, it is not necessarily right for everyone.
Review some of the Q&A’s below to learn more about what this process entails then contact my firm to speak directly with a Tampa bankruptcy lawyer about your options.
Who is eligible to file for Chapter 7 bankruptcy?
Chapter 7 bankruptcy is reserved for debtors who have found it difficult, or nearly impossible, to repay their debt on their own. For this reason, certain restrictions have been put into place, limiting the amount of people who are actually eligible to file.
In order to determine whether or not you qualify, you will need to take the means test. This test will determine how much disposable income you have—as you would be prohibited from filing under this chapter if that number is too high.
How does Chapter 7 bankruptcy work?
This process would allow you to discharge most, if not all, of your debt in a very short amount of time (typically 4-6 months). In order to do so, you would be required to liquidate certain non-exempt assets and use the proceeds to repay your creditors—starting with “priority debts.” Once these debts have been discharged by the bankruptcy court, you would be free of the legal obligation to repay them. This would essentially give you a fresh start, allowing you to move forward debt-free.
Will I be able to discharge all of my debts through Chapter 7?
Although Chapter 7 bankruptcy would give you the opportunity to eliminate a significant portion of your debt, there are certain debts that are ineligible for discharge—which means that you would still be obligated to pay them when the bankruptcy process is over.
Some of these debts include, but are not limited to: student loans, alimony and child support arrears, income and property taxes, court-ordered fines and penalties, utility bills, payday loans, debts incurred through fraud, etc.