The decision to file for bankruptcy is a serious one—and one that can be fraught with mistakes. The mistakes come with the many steps involved in the process (such as, but not limited to): deciding whether to declare Chapter 7 or 13 bankruptcy, compiling the necessary paperwork, navigating through the Chapter 7 bankruptcy means test, filing in the Eastern or Western District of Wisconsin.
The whole process of declaring Chapter 7 bankruptcy can be complicated, which is precisely the reason it can become necessary to hire an experienced lawyer. An experienced lawyer can guide those filing for bankruptcy (debtors) through the entire process. The goal of Chapter 7 bankruptcy is to ease the debt load and discharge debts.
What is Chapter 7 Bankruptcy?
Chapter 7 bankruptcy, otherwise known as liquidation bankruptcy, is the legal process for discharging debts. After filing, a trustee is appointed by the court to use nonexempt property to pay off debts, such as (but not limited to) medical or credit card debt. Some debts, such as a car or home loan, can be wiped out if the property is not wanted. Once the process is started, creditors cannot contact debtors about collection; there are exceptions, such as when the eviction process was started by a landlord prior to filing and because the debtor did not pay rent. When the process is finalized, the debt is cleared and the creditor is not allowed to collect on the debt (with a few exceptions). Examples of these exceptions are:
- Child or spousal support,
- Court fines,
- Student loans (with a few exceptions),
- Income taxes (with a few exceptions).
Who can file for Chapter 7 Bankruptcy?
Those wishing to file for Chapter 7 bankruptcy need to pass the means test. This basically means that the income of the individual or couple filing must fall under a certain amount; this is determined by reviewing past financial documents. There are certain circumstances where an individual or couple can still file even when the income exceeds the median income. A bankruptcy lawyer can provide more information on these situations.
When can I file Chapter 7 Bankruptcy?
Debts can only be discharged under Chapter 7 bankruptcy every 8 years and 6 years after a Chapter 13 bankruptcy. After a Chapter 7 bankruptcy debt discharge, a Chapter 13 bankruptcy cannot be filed for another 4 years. A bankruptcy filing stays on a credit report for 10 years.
Do I need a lawyer to file for Chapter 7 Bankruptcy?
No. However, an experienced bankruptcy lawyer can be an invaluable help when navigating through the process of filing for Chapter 7 bankruptcy.
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