When you have overdue debts creditors can become quite a nightmare. If you get to a point where your bills are too overwhelming and there is no reprieve in sight then it may be time to consider chapter 7 bankruptcy.

During the chapter 7 bankruptcy process you will no longer be bothered by debt collectors. When the process is complete and you have been granted discharge you will be able to start rebuilding your financial foundation.

By filing chapter 7 bankruptcy, you are asking the court for help in settling all your debts. Once you qualify, the court will then appoint a trustee to handle your case.

In order to pay off your debts it will be the task of the trustee to liquidate all of your property and assets into cash. The trustee also disperses the cash amongst your debtors.

First, the trustee will have to take care of you. That means he should not leave you penniless that you can’t live anymore. After your basic needs are taken care of, that is the time the trustee will start paying your creditors.

There are also certain properties you own that are not to be included in the liquidation. Examples are property you need for livelihood or profession like your tools. Same thing goes for income you earn during this period while you are under bankruptcy protection. They can not be touched as they are yours.

Because there are a lot of details involved in this process you will want an attorney experienced in chapter 7 bankruptcy in your corner.

An attorney will know the bankruptcy process inside and out. They can make it more pleasant to go through the process of achieving your goal of discharge.

He will start by asking you to take the “means test”. This test determines whether or not your income is equal to or lesser than the average state income. The means test is a requirement before you are allowed to file your petition for bankruptcy.

Once the court grants your petition, the “automatic stay” comes into play. That means your creditors are then lawfully prevented from pursuing anymore collection activities targeting you. They will instead be pointed to the direction of your trustee.

After approximately 6 months you can be discharged from your debts. Chapter 7 bankruptcy is a smooth process that works in a timely fashion.

Looking to find the best advice on filing bankruptcy, then visit www.changandcarlin.com to find information on bankruptcy law for you.

Bankruptcy filed under Chapter 13 gives people a range of advantages over liquidation under a bankruptcy filed under Chapter 7. Maybe most significantly, chapter 13 provides folks a way to preserve their homes from foreclosure. By filing under this chapter, individuals can halt foreclosure proceedings and may remedy past due mortgage payments over time.

Nevertheless, they will have to still make all mortgage payments that come due during the Chapter 13 plan by the due date. Yet another advantage of chapter 13 is that it allows people to reschedule secured debts (other than a mortgage for their primary residence) and extend them over the life of the chapter 13 plan. Doing this may lower the payments.

Chapter 13 bankruptcy also has a specific provision that protects third parties who are responsible to the debtor on “consumer debts.” This provision might shield co-signers. Finally, bankruptcy filed under chapter 13 acts like a consolidation loan under which the person makes the plan payments to a chapter 13 trustee who then distributes payments to creditors. Individuals will have no direct contact with creditors while under chap 13 protection.

Virtually any person, even if self-employed or operating an unincorporated business, is qualified for bankruptcy filed under chapter 13  as long as the individual’s unsecured debts are less than $360,475 and secured debts are less than $1,081,400. These amounts are altered regularly to reflect changes in the consumer price index. A corporation or partnership may not be a bankruptcy filed under chapter 13 debtor.

Individuals cannot file under bankruptcy filed under chapter 13 or any other chapter if, during the former 180 days, a previous bankruptcy petition was dismissed due to the debtor’s willful failure to appear before the court or comply with orders of the court or was voluntarily dismissed after creditors sought relief from the bankruptcy court to recover assets upon which they hold liens. In addition, no individual may be a debtor under chapter 13 or any chapter of the Bankruptcy Code unless he or she has, within 180 days prior to filing, received credit counseling from an accepted credit counseling agency either in an individual or group briefing. There are exceptions in emergency circumstances or where the U.S. trustee (or bankruptcy administrator) has identified that there are inadequate permitted agencies to provide the needed counseling. If a debt management plan is created in the course of required credit counseling, it will have to be filed with the court.

If you’re considering bankruptcy, talk to a local bankruptcy attorney about your options. An experienced  debt attorney can provide you with which options are right for you.

There are a number of ways of filing for bankruptcy in the US, and they are referred to as “chapters”. With 85% of debtors filing under chapter 7, this is the most popular form of bankruptcy in the US, probably as it removes all debt (there are some exceptions like tax, alimony and student loans to name 3), unlike the second most common form of bankruptcy, chapter 13, where debt is repaid by means of a legally enforced repayment plan.

The biggest attraction of chapter 7 bankruptcy is that despite the fact that all ones assets are sold and the proceeds distributed amongst creditors, an individual is then debt free. And therein lies the problem.

Unfortunately for the creditors, a chapter 7 bankruptcy will often leave them financially out of pocket by a large amount.

Now this may be unavoidable, however, it may be that an individual can, in fact, afford to repay their debts if they are rescheduled under a chapter 13 filing, which is essentially a repayment plan over a 3-5 year period.

To get over this problem, the 2005 Bankruptcy Abuse prevention and Consumer Protection Act bought in a means test. This is only applicable to individuals and consumer debt.

The means test was introduced to ensure that only those who genuinely cannot repay their debts can claim chapter 7 bankruptcy.

The means test works by taking the applicants average earnings over the past 6 months before filing, and deducting certain monthly expenses to arrive at the net “disposable income”.

There are then two more steps. The first takes your previously calculated “disposable income” figure and compares this against the median income for a family of the same size in your state. If your income is less than this, you do not need to take part 2 of the test as you automatically qualify for chapter 7.

This means that the applicant who fails the means test is forced into a chapter 13 repayment plan over 3-5 years.

The point is that you should really get professional legal advice before filing bankruptcy, so you can be properly prepared.

Bankruptcy is a drastic step, despite what other people might tell you. It can ruin your financial postion as your credit score drops. Although chapter 7 is the most common form of bankruptcy, it might be worth looking at chapter 13 bankruptcy law. If you would like further free information and advice, visit www.chapter13bankruptcylaw.net.

One of the main purposes of Bankruptcy Law is to give a person who is hopelessly burdened with debt a fresh start by wiping out his or her debts. Under Chapter 7 Bankruptcy the debtor receives a discharge on all dischargeable debts. There are 19 general classes of debt that are discharged under Chapter 7 Bankruptcy.

Chapter 7 bankruptcy, which is sometimes call a straight bankruptcy, is a liquidation proceeding. A trustee is appointed. The debtor turns over all non-exempt property to the bankruptcy trustee who then sells it for cash which is then given to the creditors. The debtor receives a discharge of all dischargeable debts usually within four months. In the vast majority of cases the debtor has no assets that he would lose, so Chapter 7 will give that person a relatively quick “fresh start”. Chapter 7 is different from other bankruptcy filings because the debtor needs not make a payment to the trustee.

An added advantage with Chapter 7 bankruptcy is that by signing a reaffirmation agreement a debtor is allowed to keep certain property by continuing to pay for a car loan or a mortgage on their home. This agreement is possible because under the US Government Bankruptcy Code a debtor could be allowed to retain some or all of his property.

Even though in some cases a Chapter 7 bankruptcy would mean that you will lose all your assets, this need not always be the case. It is strongly recommended that if you are apprehensive and feel you will lose your assets, discuss the matter with your Bankruptcy Attorney.

Under the federal bankruptcy statute, a discharge is a release of the debtor from personal liability for certain specified types of debts. In other words, the debtor is no longer required by law to pay any debts that are discharged. The discharge operates as a permanent order directed to the creditors of the debtor that they refrain from taking any form of collection action on discharged debts, including legal action and communications with the debtor, such as telephone calls, letters, and personal contacts. Although a debtor is relieved of personal liability for all debts that are discharged, a valid lien (i.e., a charge upon specific property to secure payment of a debt) that has not been avoided (i.e., made unenforceable) in the bankruptcy case will remain after the bankruptcy case. Therefore, a secured creditor may enforce the lien to recover (repossess) the property secured by the lien.

If you file under Chapter 7 you must undergo a “means test” to qualify for Chapter 7 bankruptcy. This is how the IRS determines who can or can’t file. Your income and expenses are examined to see how they compare to the standard for your area as set by the IRS.

For example, if you earn less than the median income for a family of your size in your state, you can file for Chapter 7 bankruptcy. However, if your income from the last six months is greater than the median income, and you can pay at least $6,000 over five years or $100 a month, toward your debt you can’t file for Chapter 7.

As soon as you file for bankruptcy, creditors are prevented from trying to collect on your debts through an “automatic stay.” The stay preserves your property and gives you a break from being sued. It’s very important to note that Chapter 7 will not stop repossession or a foreclosure. Automatic stays don’t cover failure of making back payments. Only by filing Chapter 13 can you delay a foreclosure.