If you are considering filing bankruptcy, you may be feeling overwhelmed by unpaid debts. The most common types of bankruptcy are Chapter 13 and Chapter 7. With a Chapter 13 bankruptcy, the amount of debt owed is reduced, leaving the consumer with only a fraction of the debt that he or she had before filing bankruptcy. With a Chapter 7 bankruptcy, much of the consumer's unpaid debt can be fully absolved. Here is a bit of information about Chapter 7 bankruptcies to help you understand the process and who is eligible.
What debts are eligible for release under a Chapter 7 bankruptcy?
There are many different types of debt that can be discharged through a Chapter 7 bankruptcy. They include:
- Bounced checks that were not fraudulently written
- Credit card debt, including late fees
- Hospital and other medical bills
- Past due utility bills
How is eligibility for a Chapter 7 bankruptcy determined?
You are eligible to file a Chapter 7 bankruptcy petition if your monthly income is below the median income for the state in which you live. In addition, you may qualify for this type of bankruptcy if you pass a means test, which compares your monthly debts to your income. If the amount of money that you have remaining after your monthly debts and expenses is less than the median income for your state, you may still be eligible for relief under Chapter 7.
Still, the system of debt relief is not designed to permit one to repeatedly file bankruptcy from year to year. Thus, people who have filed a Chapter 7 or Chapter 13 bankruptcy in the past must wait several years before re-filing. If you have filed in the past, it is best to check your records and consult with a bankruptcy attorney to determine whether or not enough time has passed for you to be eligible to file again.
Is there a fee for filing a Chapter 7 bankruptcy?
There are fees associated with filing a petition for debt relief under Chapter 7. The costs include a filing fee, an administration charge and a surcharge for the trustee. Also, you may be charged a fee by your attorney for his or her services.
What information is needed from the filer?
In order to make a final determination concerning the discharge of your debts, the court will usually need the following information:
- Your income, including the source and frequency
- Details about property that you own
- A complete list of your debts and the associated creditors
- Your monthly expenditures
To learn more about Chapter 7 bankruptcy and to determine whether or not you are eligible, schedule a consultation with a bankruptcy attorney in your area like David S. Riehl, Attorney At Law.