It might seem counter-intuitive at first, but filing for Chapter 7 bankruptcy can actually give you a fresh start. Although it’s tough to be in a position where you are forced to file for bankruptcy, doing so does not automatically mean years of bad credit or financial troubles. Fortunately, the process itself is relatively easy in most places, requiring a one-time fee and courtroom appearance to get started.
What is Chapter 7 Bankruptcy?
In order to file for Chapter 7 bankruptcy, or to even considering filing, you need to know what it is, and what the process entails. This type of bankruptcy is sometimes referred to as liquidation bankruptcy as it cancels your debts. However, you may need to let the court decide which property or assets to sell, or liquidate, for your creditors.
Can I File for Chapter 7 Bankruptcy?
You can file for Chapter 7 bankruptcy as long as you meet the designated criteria. In most cases, those who file for Chapter 7 must have an income below the state’s median income and be unable to afford any unsecured debt payments. According to justice.gov, the median household income for one person in Nevada in 2013 was $44,924. These guidelines are not definitive, meaning that some people may not be able to file for Chapter 7 even with a low to moderate income, while those with an income that is higher than the state average may still be able to qualify. Other common criteria needed for filing include a large amount of debt and no substantial property.
What Are the Benefits of Filing for Chapter 7 Bankruptcy?
One of the most immediate benefits after filing is the “Order for Relief,” or, less formally, an “automatic stay.” What this means is that most creditors must immediately stop asking you for anything that you owe them. On a temporary basis, this ensures that creditors cannot legally garnish your wages, drain your bank account, or take ahold of your car, home, or other possessions. Having an automatic stay means that your utility services or welfare benefits can’t be cut off either.
Under this fresh start, you often get to keep all of your property. After filing, you will also be legally discharged from having to pay unsecured debts, which may include credit card, medical bills, and cash advances. If you qualify and are ready for a fresh start, count on Anthony Deluca, a chapter 7 bankruptcy attorney in Las Vegas, for assistance.