What is Chapter 7 Bankruptcy and How Do I Qualify?
Unlike Chapter 13 bankruptcy, Chapter 7 bankruptcy is filed when you need to wipe out all your debts right away. Most people choose this type of bankruptcy when they are desperate and have no other option. While chapter 7 bankruptcy can help you escape your debts, filing for this type of bankruptcy comes at the cost of losing some of your property and financial assets. Making this decision is not always easy and some people benefit from the guidance of a Nevada bankruptcy attorney.
Chapter 7 Bankruptcy Basics
Chapter 7 bankruptcy is filed when you want to completely discharge all of the debts you owe to creditors. Once this is done, you will have no more debt as long as you do not accumulate debt again. There a few things that can and will happen when you choose to file for Chapter 7 bankruptcy.
For one, the court will remove all your current credit cards and your credit score will be hurt for at least ten years because the file for bankruptcy will remain on your credit history for that length of time. Prepare to list out all the debts you owe on your petition for bankruptcy. The main risk you will need to worry about with Chapter 7 bankruptcy is the repossession of your property by creditors.
Repossession can happen with your vehicle, furniture, or other belongings. However, there is a way to prevent this. You can have the property you want to keep reaffirmed. The trouble with reaffirming property is you run additional risks of high-interest rate loans and further financial problems. This is when talking with an experienced bankruptcy attorney might be able to help you make the right decision that will prevent further financial harm.
When deciding whether to file for Chapter 7 bankruptcy, it helps to know what debts cannot be discharged. These debts include child support, fines, income tax, and student loans.
How to Qualify for Chapter 7 Bankruptcy
Before you can file for Chapter 7 bankruptcy, you need to qualify for Chapter 7 bankruptcy. The good news is you can file for Chapter 7 bankruptcy regardless of how much debt you have. You must also have undergone credit counseling within the last 180 days. Within those same 180 days, you must appear before the court and obey court orders, or else you could be banned from filing for bankruptcy.
Be aware that not all debts can be discharged, and you cannot have debts discharged as a corporation or partnership, but only as an individual. In terms of paperwork, you will be required to submit:
- Schedules of assets and liabilities
- Schedule of income and expenditures
- Statement of financial affairs
- Schedule of executory contracts and unexpired licenses
Contact a Nevada Bankruptcy Attorney
Filing for Chapter 7 bankruptcy is a difficult decision to make, especially if you fear the loss of your property. Work with a Las Vegas bankruptcy lawyer if you have questions about filing or about reaffirming your property. Call the Aaron Law Group today at (702) 550-1111 for a free consultation. We are located in Las Vegas, Nevada.