West Palm Beach Chapter 7 Bankruptcy Attorney
If you are facing large amounts of debt and don’t have any viable options ahead of you, filing for bankruptcy may provide the relief you need. Before you pursue a bankruptcy, though, it is important that you understand the different types of bankruptcy, the bankruptcy process, and how filing for bankruptcy will affect you financially. Chapter 7 bankruptcy is one of the most common bankruptcy types – reach out to our West Palm Beach Chapter 7 Bankruptcy attorneys at the law office of Bruce S. Rosenwater & Associates, P.A. today for the help and guidance you need related to a Chapter 7 bankruptcy action.
The Basics of Chapter 7 Bankruptcy
Chapter 7 bankruptcy, also called liquidation bankruptcy, is one of two bankruptcy types pursued by individuals. Chapter 7 is referred to as “liquidation” bankruptcy because debtors will need to sell non-exempt assets, or ‘liquidate’ them, in order to pay back a portion of their debts. Most unsecured debts, however, will be wiped out.
Chapter 7 Bankruptcy and the Means Test
In order to qualify for a Chapter 7 bankruptcy, a debtor must pass a means test. The means test is a way of determining whether or not a debtor makes too much money in order to qualify for a Chapter 7 bankruptcy, and must instead pursue a Chapter 13 (repayment) bankruptcy. While the means test is comprehensive and involves an assessment of financial records such as tax documents, bank statements, etc., the general purpose of the means test is to determine whether or not the debtor’s income is more than the state median income; if it is, then the debtor will likely be precluded from filing a Chapter 7 bankruptcy.
Benefits and Disadvantages of a Chapter 7 Bankruptcy
If you pass the means test, filing for a Chapter 7 bankruptcy may be your best option. However, it’s important that you are aware of both the advantages and the drawbacks of a Chapter 7 bankruptcy. Some of the advantages include:
- Initiation of the automatic stay (as soon as you file, there will be a pause put on collectors’ ability to collect on debt);
- Some property will be exempt, which means that you will be able to keep it; and
- Many of your debts will be wiped out.
Some of the disadvantages include:
- Chapter 7 bankruptcy will remain on your credit report for up to 10 years;
- You may be forced to give up many important assets, including your home;
- It will likely be very hard for you to get a loan or take out credit for the decade following your bankruptcy action.
Call Our Chapter 7 Bankruptcy Attorney Today
Bankruptcy isn’t always the right solution, but it may be exactly the relief you need if you are drowning in debt. At the law office of Bruce S. Rosenwater & Associates, P.C., our experienced Chapter 7 bankruptcy attorneys want to help. If you have questions about filing for a Chapter 7 bankruptcy, please call us today for the guidance and reliable legal counsel you need.