Chapter 7 Bankruptcy Explained
When most people discuss the possibility of declaring bankruptcy, they are referring to the action of going to court with evidence of the fact that they are drowning in debt that has reached such massive proportions that they cannot realistically see any possibility of paying it all back. They are talking about a type of legal relief which allows a person to get out of debt within a period of only a few months and without paying another dime to the creditors, leaving the individual free to make a fresh start in life. The fact is that there are several different types of bankruptcy, and the one that they are referring to is known as Chapter 7.
Protecting Your Assets in Chapter 7
Chapter 7 bankruptcy is frequently referred to as liquidation bankruptcy due to the fact that the court will assign a bankruptcy trustee to oversee the case and attempt to sell off as much as possible of the debtor’s personal estate in order to raise funds to pay back the creditors. For this reason, many people who consider declaring bankruptcy shy away from Chapter 7, thinking that it would require them to sacrifice a large part of what they own. In truth, most Chapter 7 bankruptcies are “no-asset cases,” because the generous exemptions in Florida make it possible to exempt most or all of your estate from the reach of the bankruptcy trustee.
Chapter 7 Means Test
One of the most important steps in a Chapter 7 bankruptcy case comes at the very beginning of the process. Before you will be permitted to proceed with your petition, you will have to pass a means test of your income to prove that you truly do need this sweeping form of debt relief. Many people who factually are eligible do not make it past this point because they fail to take advantage of the many allowances which are available under law to improve the chances of passing the test. You can avoid this common mistake by hiring an experienced Ocala bankruptcy attorney to assist you with the paperwork and to represent your case in court.
Get Out of Debt Quickly
One of the most attractive aspects of Chapter 7 bankruptcy is that it offers the opportunity to have most or all of your unsecured debts – such as credit cards, medical bills, past due utility bills and others – discharged within a period of only a few months. Chapter 13, which does have its own advantages, requires that the debtor continue to make payments on the debts for a period of three or five years. Not everyone will qualify for Chapter 7, but if you do you could very soon be free from your problems with debt and ready to start your life after bankruptcy. Contact The Law Offices of Justin McMurray, P.A. now for a free consultation now to discuss your situation and find out whether this is an option for you!