Are You a Good Candidate for Chapter 7 Bankruptcy?
Chapter 7 is the section of the U.S. bankruptcy code dealing with liquidation. If you're buried in unsecured debts such as civil court judgments, IRS or medical debt, personal loans and credit card bills, Chapter 7 bankruptcy could be the right choice for you. Chapter 7 is fast, efficient and effective, and it gets you out of debt in only a few months. But how can you know if you're a good candidate for Chapter 7 relief? Consider these questions:
How much are you earning? If you're working steadily but earning less than the average Georgian in your area, or if you've been out of work for a while, Chapter 7 might be a good option.
Is your disposable income close to nil? If, after you've paid all your bills, you have next-to-nothing left over, it's time to consider Chapter 7.
How high are your credit card balances? If you're at the limit on one or more cards and paying such high interest that you can't bring those balances down, you could be stuck with the same debt for decades unless you opt for Chapter 7.
Do you have medical bills left over from a long, expensive illness? When medical bills are part of your debt load, it's important to note that these debts are dischargeable through Chapter 7 bankruptcy.
Do you rent your residence? Homeowners fare better under a Chapter 13 plan, but renters have nothing to lose.
Do you have few high value assets you want to keep? If you don't mind selling off non-essential items, Chapter 7 is appropriate.
Are you expecting an inheritance or other windfall? This is something you really need to discuss with your bankruptcy attorney. It would be very bad timing to file for Chapter 7 bankruptcy just as you received a large lump sum payout. Those funds would go straight to your creditors.
How will liquidation affect your car? That depends entirely on what kind of car you own and whether it's fully paid off. If you have a modest vehicle you use for work, chances are you'll be able to keep it under Chapter 7, even if you owe a portion of your car loan. If it's a classic that you've lovingly restored and want to pass on to your children, you might want to consider filing Chapter 13, which is better designed to protect assets.
Still wondering whether Chapter 7 bankruptcy is your best path out of debt?
Find out for free if a Chapter 7 bankruptcy plan will work for your family. Call Atlanta DebtStoppers at 404-796-7161 or fill out our online form to schedule your free one-on-one debt analysis.