If you're have trouble with credit card and/or loan payments, Chapter 7 bankruptcy can erase many debts.
Chapter 7 bankruptcy is a process that liquidates your assets. Selling some of all of your non-exempt possessions will help repay your debts to the original loan company or debtor. There are many possessions up to certain dollar limits that you can keep under Chapter & bankruptcy. Possessions that are exempt up to a certain dollar amount under Chapter 7 bankruptcy include the following:
1. Homestead / Home Equity
2. Motor Vehicle
3. Personal Property including
4. Retirement Accounts
5. Tools of a Trade
If you are a married couple filing for bankruptcy together can usually double the value of most exemptions, except the homestead exemption.
Is Chapter 7 Bankruptcy Better Than Chapter 13 Bankruptcy?
Your personal circumstances should guide you in deciding whether Chapter 7 is better than Chapter 13. Chapter 7 is only an option for households with limited income; if your income exceeds your state’s median and you are deemed to have enough disposable income to repay even a small portion of some of your debts, you will be required to file Chapter 13. If you qualify for Chapter 7 but have non-exempt property that you wish to keep or you are delinquent on your mortgage but still want to keep your house, Chapter 13 may be a better option.
What is not exempt under Chapter 7 Bankruptcy?
Student loans are not forgiven Chapter 7 bankruptcy is filed unless permanent injury or illness is proven which makes it impossible for repayment.
Current tax debt less than three years old. If your filed tax returns are older than three years, that debt may be eligible for discharge as long as tax filing rules were followed.
Child support and alimony
Certain judgements for fraud, willful injury or wrongful death.
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