When Filing Bankruptcy Is the Best Option

4 Things To Know About Chapter 7 Bankruptcy

If you are having problems paying your debt, you should consider filing for a Chapter 7 bankruptcy. This will help discharge many of the bills that you simply can't pay. You may have lost your job, or you may be going through a divorce that has resulted in a significant decrease in your income. There are specific things you should know if you intend to file for this type of bankruptcy.

The Costs

The last thing you want to face is high fees when your income is lower than it used to be.  The good news about filing for this legal status is that it has an affordable cost. As of June 1, 2014, the court costs and administrative fees for filing for a Chapter 7 bankruptcy are about $335.

The Forms

You must prove that you are eligible for this filing status before you will be considered. This means you must fill out a number of forms that show your financial status.

Listed below are ways to improve your eligibility:

1.  Getting a W-2 that states the full amount of your income annually.

2.  Making a list of your monthly expenses, which can include the costs of rent, food, and clothing.

3.  Making a list of all of your creditors; and, you should list the amount of debt to each one separately.

These forms will provide the court with the necessary information to determine if you qualify for the status of bankruptcy.

The Automatic Stay

One of the biggest advantages of filing for a Chapter 7 bankruptcy includes the automatic stay. This will prevent any of your creditors from contacting you by phone, mail, or even in person. Additionally, your creditors won't be capable of filing a lawsuit or seizing any of your properties in an attempt to receive past-due payments.

The Credit Counseling

You must attend courses in credit counseling before you will be eligible to receive the benefits offered by a completed Chapter 7 bankruptcy status. These courses must be approved by a court; and, one session typically last about 60 to 90 minutes. Additionally, you can take this course online at your convenience.

Finally, there are a number of benefits of filing for this financial status. Be sure to rely on the expertise of a bankruptcy attorney, like Michael Hart D PC. A lawyer can guide you through all of the necessary legal steps; and, they can guide you through these steps both quickly and accurately.