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Filing for Chapter 7 bankruptcy in the new year

| Dec 20, 2019 | Bankruptcy |

The new year is a time for positive change and fresh starts. It is also a time to reflect on the year just past and the bad habits that you may have been engaging in. If you have accumulated debts in the past year, the new year is a great time to start reflecting on how you can address these issues going forward.

Chapter 7 bankruptcy is a common choice for those who have quickly accumulated debts. This is because it is completed in just a few months, and in most cases, it clears all debts, allowing you to enjoy the rest of the year without the burden of heavy debts.

How does Chapter 7 bankruptcy work?

Chapter 7 bankruptcy is commonly referred to as liquidation bankruptcy. This is because it engages in the process of liquidating your assets to pay off your debts. If your nonexempt assets are not enough to pay off your debts, you will likely benefit from a debt discharge.

Will I be eligible for Chapter 7 bankruptcy?

Not everyone is eligible for Chapter 7 bankruptcy. This is because all those intending to file must first pass a means test. This means test looks at a debtor’s income and living expenses to determine whether they could realistically pay their debts back through another method such as Chapter 13 bankruptcy.

If you want a fresh financial start in the new year, it is important that you seriously consider how filing for Chapter 7 bankruptcy could improve your quality of life. By conducting thorough research, you will be able to determine whether it is the best choice for you.

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