Do you have an ample amount of debt that you either are having an extreme amount of difficulty paying off or that you simply cannot afford to pay off? Chances are you might want to file for bankruptcy. There are numerous forms of bankruptcy for which you can file; the most common of these being Chapter 7. Filing for bankruptcy can be confusing, and it will help you to know the steps that you should take before you start to file your bankruptcy claim.
Scrutinize Your Debt
It is important to examine your debt and make sure that all of the debt you owe is forgiven by the Chapter 7 bankruptcy process. There are some forms of debt that cannot be discharged by the Chapter 7 bankruptcy process. For example, in no case are child support obligations forgivable by Chapter 7 proceedings. You will also not be able to discharge any student loan debt or any back taxes that you might owe to the IRS.
Although there are a few debts you cannot discharge, most debt should be able to be discharged. Commonly, you should be able to discharge credit card debt, medical bills, utility bills, as well as business debts.
Determine Exemptions
Although it varies from state to state, every state has exemption laws which will determine what property you will be able to keep after the process of Chapter 7 bankruptcy has been completed. In some cases, you will be able to keep most of your major assets; in other cases, you will only be able to keep your earnings in your checking account, while the rest of your property will be seized. It is important to ask your attorney about the exemption laws that exist in your state before filing for Chapter 7.
Reaffirm Secured Debts
If you promised some form of collateral, such as property or a beloved heirloom, you will need pay something to the creditor in order to get your collateral returned back to you. When you file for Chapter 7 bankruptcy, you will be asked if you want to reaffirm or redeem said property. Redeeming the property simply amounts to you paying off the debt on its original terms. Reaffirming secured debts means that you will have to renegotiate the terms of paying off the debt in correspondence with the terms laid out by Chapter 7 bankruptcy.
Fill Out And File Forms
You might have to fill out and file more than 20 pages of forms in order to file for chapter 7 bankruptcy. These forms will document several things about your life and will also serve to document the amount of income you make, your current assets, etc. You will also need to list your creditors, the amount of debt that you have that is outstanding and how you plan on paying back the amount owed on your debt. Filing said forms officially starts the process of Chapter 7 bankruptcy. Most file all of the forms at once, but there is a 2-page starter form you can fill out which will begin the process but will require you to fill out the rest of the forms over the course of the next 2 weeks.
File Objections If You Need To
There might be certain debts owed that you think have already been paid off or you do not believe that you owe in the first place. You will have to file an objection for said matters. Any debts or liens that you find to be suspicious or you outright know that you do not have to pay must be filed in the form of an objection.
Chapter 7 can be a bit of a confusing process, at first. However, it need not be the case. Hopefully, this brief article has shed a bit of light on the process. Continue reading more on the different types of bankruptcy and talk with a bankruptcy attorney to figure out what is best for you.
