A Chapter 7 Bankruptcy

August 30, 2019

More Debt, More Problems

With increasing credit card debts, more individuals look to bankruptcy filings as they fail to maintain their credit card debts and lifestyles. Wiping out credit card debt through bankruptcy is becoming a more attractive option as the pressure heats up for debtors. 

With increasing credit card debts, more individuals look to bankruptcy filings as they fail to maintain their credit card debts and lifestyles. Wiping out credit card debt through bankruptcy is becoming a more attractive option as the pressure heats up for debtors. 

A chapter 7 bankruptcy involves a request to the court to discharge debts in exchange for one’s property. Usually, all of one’s property may be exempt from being exchanged for discharge of debts but in some cases, property must be sold in order to distribute money to creditors. 

In order to keep property after filing a chapter 7 bankruptcy in Orlando, you may have to make an agreement to pay the debt off in installments. Debtors may also dispute the debt. 

Requirements for Chapter 7 Bankruptcy

Chapter 7 bankruptcies offer a window to eliminate unsecured debt as well as secured debt. It does not require that money is paid back to unsecured creditors. Certain requirements must be met to qualify for a chapter 7 bankruptcy. A means test must be completed, among other key steps.

Before filing for bankruptcy, you will need to receive budget and credit counseling from a credit counselling agency within 180 days before a bankruptcy case is filed. A certificate must be collected from the agency before the case is filed. 

When a chapter 7 bankruptcy is filed, credit card use in excess of $900 will be considered as an adversarial which may block the discharge of the debt. While a bankruptcy court may not be concerned with what the credit cards are spent on, they may pay more attention to the timing of transactions. The bankruptcy court may consider whether the debtor made purchases of assets that they failed to disclose. 

More Factors to Consider

One of the most important factors to consider when deciding whether or not to file for a chapter 7 bankruptcy is income and expenses. These figures can help to determine how much disposable income is available to service credit cards. If one is running at a deficit even with the use of credit cards, a chapter 7 bankruptcy filing may be worth consideration. 

When considering whether or not property is exempt from chapter 7 bankruptcy, one must take into account how property is valued under the laws of their state. In Florida, the value of property considered in bankruptcy is not the amount initially paid for it but rather its value when a filing is made for bankruptcy. 

Equity is also another significant factor in a chapter 7 bankruptcy. Exemptions can allow one to keep keep property which they have equity in. A home with an equity stake in it may be fully protected. The non-exempt value of the property may need to be paid to the trustee over 10 months. 

Filing a chapter 7 at the court can cost as low $335 . Fees charged by lawyers can be between $1300 – $2500. Fees charged by lawyers for chapter 7 bankruptcy have to be paid upfront. Unlike filings for a chapter 13 bankruptcy, the court is unlikely to call a hearing over potentially excessive fes. 

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