If you are considering filing for bankruptcy, you most likely have several concerns. Bankruptcy is a big decision, and if you do it at the wrong time, it may have a significant impact on your life. If you think it is time to file for bankruptcy, here are some of the questions you may have:
What is Chapter 7 bankruptcy?
Essentially, if you are unable to pay your debts, filing for Chapter 7 bankruptcy will convert your assets into cash by creditors. Being able to walk away from your debt is usually a huge relief to people who find themselves in this situation. In order to ensure you are properly going through the motions, you should hire a knowledgeable attorney who knows the ins and out of the bankruptcy process.
How do I know if I am eligible to file for Chapter 7 bankruptcy?
In order to be eligible to file for Chapter 7 bankruptcy, you must first pass the means test. Basically, you have to compare your income to the median income for a comparable household in your state. Generally, if your income is below the median income, you will qualify for Chapter 7 bankruptcy. However, this does not mean that you will definitely not qualify if your income is greater than the median.
What does the Chapter 7 bankruptcy process look like?
First, you file a petition for bankruptcy, as well as sign various other documents that will require you to provide the following information:
- An account of your income
- Your monthly living expenses
- A list of all your debts
- A list of all your assets, including all of your real estate and possessions
Once you provide this information and have filed for Chapter 7, an automatic stay goes into effect. Your assets are then handed over to a court-appointed agent called a bankruptcy trustee. He or she will then assign value to your property and use your assets to pay off as much of the debt as possible. You then must attend a Meeting of Creditors, or a 341(a) hearing. Here, you, your attorney, the trustee and any creditors who wish to attend will meet and discuss your financial situation. This will give the trustee a clearer picture of your financial situation and allow creditors to collect information that would support a rejection of the matter. If you have successfully gone through the Chapter 7 process, a court should grant you a bankruptcy discharge. The only things ineligible for discharge are student loans, child support, and most tax debts.
Contact our Middlesex County firm
Juan C. Velasco, Esq. is a trusted attorney who concentrates on bankruptcy, family law, real estate, and estate matters who has been serving the New Jersey area for over 25 years. If you are in need of experienced legal counsel, please contact Velasco Law Office and we will be happy to assist you.