Will you Qualify to File?
- Stop Garnishments
- Prevent Lawsuits
- Get Rid of Judgments
- Prevent Repossession
- Handle Personal and Business Debt
Income is a factor in determining if an individual is eligible to file under Chapter 7 of the US Bankruptcy code. But in some cases, even individuals with a fairly high income can file if other requirements are met.
Advantages of a Chapter 7 Bankruptcy
Filing a Chapter 7 puts a stop to creditor garnishments, can prevent repossession, and in some cases can also eliminate tax debt. The advantages of a Chapter 7 are that you do not have to make payments over time. Most types of debts are forgiven or discharged in a Chapter 7 Bankruptcy.
Chapter 7 Limitations
However, a Chapter 7 cannot really help in the case of foreclosure. Though it may delay the foreclosure for a month or so, it does not have any mechanism whereby a property owner can catch up on missed payments, or negotiate a loan modification. It is also not possible to strip off a second mortgage in a Chapter 7, though this can sometimes be done in a Chapter 13.
Other disadvantages of a Chapter 7 include the inability to protect assets that may have a higher value than is allowed for by the state and federal laws. In a case where assets have higher values than can be protected, your bankruptcy attorney may be able to negotiate on your behalf to help you keep assets that are important to you. This situation is handled differently in a Chapter 13.
In the right situation, however, Chapter 7 is an invaluable tool to get out from under the burden of crippling debt. If your case is an extremely simple one, you may be able to file and get a discharge filing on your own. However, what may look like a simple set of facts to someone inexperienced with bankruptcy law, may be riddled with unseen complications and issues. And if you have business debt, tax debt, a large amount of equity in your home, self employment, or other issues it is important to find and work with an attorney who is both experienced and knowledgeable about all the options, and just as importantly, really takes the time to get all the facts, so he can advise of potential problems, help to resolve them, and ensure that your assets, income, business, and other family members are adequately protected.