When you are unable to pay your debt, you may want to consider filing for Chapter 7 bankruptcy. If you qualify for this status, you will be able to have some of your debts discharged. Knowing specific things about a Chapter 7 bankruptcy may get you motivated to begin this process.
Requirements
In order to qualify for this type of bankruptcy, you must prove that you are eligible for it. You will be required to pass a means test which should show that your income and expenses are less than your debt.
Forms
You will be required to fill out certain forms to identify your financial status to the courts. Listed below are what you will need to include in the forms:
- The amount of your income and you should be prepared to prove what this amount is with a pay stub or past tax forms.
- Your monthly expenses that should include food, shelter, and clothing for a month.
- The amount of money that is owed to your creditors and this amount should be listed individually.
Costs
The filing fees for Chapter 7 bankruptcy are relatively low. As of June 1, 2014, you are only required to pay $335 for the court fees and administrative costs. However, if you choose to hire an attorney to do this for you, there will be an additional cost for the legal fees.
Automatic stay
One of the advantages of choosing a Chapter 7 bankruptcy is that you will be awarded an automatic stay. This will prevent your creditors from contacting you to attempt to collect on the debt that is owed. Additionally, the automatic stay can prevent you being sued by the creditor as well.
Credit counseling
Before you even begin the filing process of a Chapter 7 bankruptcy, you must complete a credit counseling course. This should be approved by the bankruptcy court in order for you to be capable of filing for this status. It is recommended that you start this process early because you are required to complete the credit counseling course at least 180 days before filing for the status of bankruptcy.
When you have outstanding debt that is going unpaid, you should consider filing for bankruptcy. Be sure to work with an attorney like Craig H. Lane, PC if you feel you need additional assistance with the completion of this legal process and knowing precisely what you are supposed to do.
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