December 18, 2010

The Truth About Chapter 7 Bankruptcy

Posted in Bankruptcy tagged at 8:36 am by demetriagraves

The more Bankruptices I oversee, I find that there are a lot of misconceptions about the bankruptcy process . This article outlines the truth about bankruptcy by highlighting some common true or false scenarios. Most people who find themselves considering bankruptcy are good people who have fallen victim to bad circumstances that make it difficult or completely impossible to pay off their debts. They need a fresh start and that is exactly what Chapter 7 bankruptcy is designed to do.

True or False: If you file chapter 7 bankruptcy you will lose everything.

FALSE: Most people believe they will lose everything if they file a Chapter 7 bankruptcy. That is false. Bankruptcy law allows you to keep much of what you have. While every situation is different, you should be able to keep your cars, personal belongings, tools of your trade, and even the equity in your home (depending on the amount of equity).

True or False: You have to have no income to qualify for Chapter 7 bankruptcy.

FALSE: Most clients are surprised to learn that they can have a decent paying job and still qualify for Chapter 7 bankruptcy. As a family you can earn as much as $50,000-$60,000 and if single make as much as $37,000, and even if you make more than the guidelines specified, there are other means which my allow you to qualify for Bankruptcy, such as credit for your car, your mortgage deductions and other factors.

True or False: Chapter 7 bankruptcy can stop a foreclosure.

TRUE: The legal protection of a Chapter 7 bankruptcy will temporarily stop foreclosure.  Although banks can request “leave of stay” to proceed, the bankruptcy will initially stop the pending foreclosure.

True or False: Chapter 7 bankruptcy can stop wage garnishment.

TRUE: The Chapter 7 code can stop wage garnishments with the exception of Child Support garnishments which are exempt from bankruptcy. The Chapter 7 bankruptcy code was designed to give you a fresh start.

True or False: Chapter 7 bankruptcy can stop harassing credit card bill collectors.

TRUE: Under the automatic stay law, the creditors named in your bankruptcy have to stop contacting you. Many clients say that being free of harassing bill collectors makes their lives enjoyable again. Plus imagine life without debt, a Chapter 7 bankruptcy can make that a reality.

True or False: You cannot afford Chapter 7 Bankruptcy.

FALSE: Many clients can’t afford not to proceed with a Chapter 7 bankruptcy. Once all of your credit card bills, medical bills, and other unsecured loans have been eliminated, you will find paying for your basic living expenses is a lot easier. Most attorneys, including myself will work with you in getting your Bankruptcy complete.

Should you want to discuss this matter further, I offer a free 30-minute phone consultation, and we can discuss your individual questions about Bankruptcy.

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