The Chapter 7 bankruptcy process can be confusing, and people have many misconceptions about the possible benefits and drawbacks of bankruptcy. Always feel free to discuss your options with a Chapter 7 bankruptcy lawyer in Melbourne. In the meantime, the following are some common questions we hear about Chapter 7.
Chapter 7 bankruptcy provides the discharge of your debts without requiring any payments. For this reason, the law allows people to file for Chapter 7 when they do not have enough income to make payments. You must pass the “means test” to qualify for a Chapter 7 case, which means that your household income is less than the median income for your state.
Even though you do not have to make payments in a Chapter 7 case, the bankruptcy trustee has the authority to take certain property and assets to liquidate and make payments to your priority creditors. This is why Chapter 7 is called the “liquidation” bankruptcy. However, there are numerous exemptions (that vary from state to state) that your lawyer can help you apply to protect as much of your property as possible. In fact, many people do not lose any property at all, though this depends on your circumstances.
Most people who need bankruptcy are already behind or in default on many debts, which means their credit scores likely plummeted. While bankruptcy does remain on your credit report for seven to ten years, your score can improve quickly because you will not have late payments and defaults constantly reporting. There are many ways to build credit again and obtain loans in the future.
If you have questions about Chapter 7 bankruptcy, do not hesitate to speak with Harnage Law, PLLC. Call 321.549.7886 or contact us online to schedule a consultation with a Melbourne bankruptcy attorney.