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Chapter 7 Bankruptcy Basics
Due to the difficult economic times millions of individuals, married couples and businesses today are facing financial crisis, followed by debt, collection calls, and threats of garnishments and repossessions. Many Americans never thought they would ever have to consider bankruptcy as a way to get out of debt. But the truth is that bankruptcy can be one of the most effective tools to not only to settle your liabilities, but also save your home from foreclosure, your car from repossession, and finally get your piece of mind back. After all, bankruptcy was created not to ruin peoples’ lives, but to resolve their debt in a legal manner and give them a chance at a fresh financial start.
There are several types of bankruptcy, each involving a different process and producing slightly different results. Individual bankruptcy is typically divided into two categories: Chapter 7 Bankruptcy and Chapter 13 Bankruptcy. Meanwhile, corporate bankruptcy is typically categorized as Chapter 11 Bankruptcy. The decision of which type of bankruptcy is right for you is based on your unique financial situation. Therefore we strongly advise to consult our Indiana bankruptcy lawyer before filling out and filing any bankruptcy paperwork.
The most common individual bankruptcy proceeding is bankruptcy under Chapter 7 of the Title 11 of the United States Code. It is also called liquidation or “straight” bankruptcy because of the quick relief this type of bankruptcy process offers. Chapter 7 bankruptcy is a good option for people who have large amounts of credit card or other unsecured debt like utility bills, payday loans and certain medical bills, and are having trouble making minimum payments or when the minimum payments made don’t seem to make a dent in the total amount owed.
The Chapter 7 bankruptcy process consists of filing a bankruptcy petition and other court required documentation, appointment of a trustee to oversee the case, a meeting with the creditors, determination of exempt and nonexempt assets, liquidation of the nonexempt assets, disbursement of the proceeds to the creditors and, finally, discharge of debt.
Although the process of the Chapter 7 bankruptcy is fairly straightforward, it’s relief is limited by certain income restrictions. To be eligible for Chapter 7 bankruptcy, your current monthly income has to be less than the state’s median income for the household of your size. Alternatively, if your income exceeds the state median you may still qualify for Chapter 7 by passing the Chapter 7 bankruptcy “means test”. The “means test” determines your “monthly disposable income” by deducting specific monthly expenses from your current monthly income. Subsequently, you can earn significant monthly income and still qualify for Chapter 7 bankruptcy if you have a lot of expenses such as high mortgage payments. An experienced Indiana bankruptcy lawyer can help you figure out whether your individual situation qualifies for Chapter 7 bankruptcy.
Chapter 7 bankruptcies allow people to wipe out virtually all of the debt without losing all of their property. Thus, in a Chapter 7 bankruptcy you will most likely keep your exempt property, which includes your house, your car, your income and other necessary items. Non-exempt property may have to be sold, but there are very few circumstances that this is the case. It is important to note that an experienced Indiana bankruptcy lawyer may be able to take certain limited steps to protect some non‑exempt assets and convert them to exempt assets, but it has to be done before the filing of the bankruptcy petition. After the funds are disbursed to the creditors, the matter is generally considered settled.
Lastly, once you file for bankruptcy, the law requires that all collection, foreclosure and repossession activity stop immediately. Subsequently, you will stop receiving harassing phone calls and letters from bill collectors and you will finally be able to relax again.
Surely, the process of bankruptcy may seem scary and overwhelming, but it becomes a lot easier when you have an experienced Chapter 7 bankruptcy professional by your side. Jason Wischmeyer is highly qualified to handle all aspects of your Chapter 7 bankruptcy case, answer any questions and expertly guide you through the bankruptcy process and toward better financial future for you and your family.
Thus, if you are considering filing for bankruptcy, have questions about bankruptcy laws and need help protecting your assets or require assistance with an already pending bankruptcy case, contact a knowledgeable Bankruptcy Lawyers Indianapolis at the Wischmeyer Law Office by phone at (317) 429–0210 or by email at firstname.lastname@example.org and let us know how we can help.