Just because you are grappling with financial distress doesn’t mean you have to file for bankruptcy. However, bankruptcy could be the ultimate option for some people who do not have other viable means of debt management. Bankruptcy can be classified into two segments – Chapter 7 and Chapter 13. More than 60% of all bankruptcy filings are Chapter 7. If you believe that this could be your option, it is important to find a reliable bankruptcy attorney Hagerstown, MD, for a consultation. Lawyers can help you understand if you would qualify for Chapter 7. For your help, here are some key aspects worth knowing about Chapter 7.
The basics
Not everyone qualifies for Chapter 7 bankruptcy filing. There is a means test that will consider your disposable income compared to the state median income. The median income varies between states. If you file for Chapter 7 bankruptcy, you should be able to discharge most of your unsecured debts, but there are exceptions. For example, if you were paying child support and alimony as part of a divorce settlement, you still need to fulfill those obligations. Bankruptcy laws can be complex, and it’s crucial to understand how they may impact your financial situation. Seeking legal advice before pursuing bankruptcy is essential to protect assets and navigate through the intricacies of the process. Prenuptial agreements, if established before marriage, can play a crucial role in delineating financial responsibilities and protecting assets in the event of a divorce. In that regard, consulting with legal experts, such as the ones providing Montgomery County prenuptial agreements can provide valuable insights. Understanding the legal nuances, especially in the context of divorce and prenuptial agreements, can ensure that individuals can make informed decisions regarding their financial future during the bankruptcy process.
That being said, it’s important to recognize that the debts that you can discharge through Chapter 7 bankruptcy include medical bills, unsecured personal loans, credit card bills, and income tax. Additionally, if you decide to surrender your home, you can get rid of unpaid HOA fees too.
When is Chapter 7 a viable option?
A skilled attorney can advise you on the pros and cons of Chapter 7 for your circumstances. Bankruptcy can have different outcomes for different people, and this is the precise reason why you need to consult an attorney. Chapter 7 could be an option for you if your debts are more than your annual income. If you have debts that cannot be repaid in many years to come despite taking drastic measures, you may benefit from the decision. Chapter 7 is also an option for people with very little or no disposable income.
Other things to know
What happens to your house? If you have a mortgage and have been current with your payments, you can keep the house as long as you can pay for the upcoming payments. You should be able to retain your car too. Filing for bankruptcy involves a considerable amount of paperwork, and you have to get it right. Make sure that you do your homework and hire an experienced and known lawyer. Your attorney can take care of the bankruptcy process, which can minimize your stress.
