How To Qualify for Chapter 7 Bankruptcy

Filing for bankruptcy is considered to be the measure taken when somebody fall into the pits of financial ruin, then falls into that pit’s pit – that’s how bad it is. Now if you find this concept a little hard to understand, here’s what you’ve got to know: bankruptcy is the state of an individual where he is no longer capable of paying off his debts, so he files for such as to “appease” or settle with the people he owes. Yeah it’s as simple as that, but are you aware that there are different chapters that you can be classified under? If you did, then I’ll ask you this: which is the worst amongst all of the bankruptcy chapters? To many, it’d be none other than chapter 7 bankruptcy. nnThe chump having to file under chapter 7 bankruptcy is forced to sell all of his assets (declared and the ones not exempted), which would be real bad for the business, why? Because having to liquidate your goods would mean that there’ll be no way for your venture to continue operating you big dummy. Common sense would have told you that, right friend? Anyways, moving forward, let’s explore chapter 7 bankruptcy further: first off, matters here are taken into the hands of a bankruptcy court, naturally. A trustee will be needed here, mainly because he’s the guy that’ll be making the arrangements for the disposition of your assets. nnYou’re left with no choice, since your creditors are pissed, so liquidating would be your only option. The money that is reaped from the “sales” will then be forwarded to the people or lending organizations, or whoever you borrowed from (taken that they’re legit) to settle the amounts you owe them. There are some exemptions, in the sense that there are some assets that won’t be needed to sell off, but it’ll depend on the laws of the state you belong to. The next thing that we need to tackle in regards to chapter 7 bankruptcy is eligibility. You see, not everyone will be given the “privilege” for filing under the said chapter; there is a certain criterion for you to oblige with. nnHere it is: the means test. Hold on, what the heck is that, you ask? Well think of it as the “formula” that’ll determine whether or not you can qualify for such a state. There are two elements that will be used for computing, namely your income and expenses. What’s done here is the expenses are subtracted from the income, and the result will be the one thing that will determine your eligibility. You see, if the result is less than the median income of the state, then you will be more than qualified to file under chapter 7 bankruptcy. nnBut if the result is greater than the median income of the state, then tough luck, go file under a different chapter. Now you’re probably wondering how much the whole procedure of filing under chapter 7 bankruptcy is gonna cost you, right? Taken that you are interested, it’s going to cost you anywhere from 250 to 350 bucks, depending on your case. There’ll also be a long-term cost, but it’ll be thoroughly discussed by your lawyer, unless you already knew that.