Why Should You File Chapter 7 Bankruptcy?
Chapter 7 of the bankruptcy code permits a client to eliminate his debts and resolve his debt situation. It is the most common form of bankruptcy because it is systematic and offers debt relief. In the past, a large number of individuals filed for bankruptcy, making it difficult for creditors to process the claims of every client. However, changes to the bankruptcy law have made it more difficult for individuals to apply for bankruptcy. The Obama administration amended chapter 7 laws to permit individuals with excessive debt to authorize the bankruptcy authorities or trustee to liquidate all non-exempt assets and distribute the cash to all creditors, thereby dissolving the applicant's debts. Prior to filing for chapter 7 bankruptcy, one must now undergo a means test and credit counseling, as required by the new law.
What is an income test?
A person must first pass a means test before registering for chapter 7 bankruptcy. In this exam, the client's entire financial profile will be evaluated. Financial details include monthly income, daily and necessary expenses, and the result of deducting the expenses from the total monthly income determines eligibility for chapter 7 bankruptcy. If the result is greater than the state's median income, the individual is permitted to file for bankruptcy; otherwise, the court recommends chapter 13 bankruptcy.
Insolvency Counseling:
The term 'bankruptcy counseling' implies that assistance is available. Anyone experiencing a severe financial crisis is encouraged to contact a credit counseling agency that offers bankruptcy counseling services. They evaluate the client's financial situation, including his income and expenses, and then attempt to find a way for him to repay his debts and get his life back on track. If the credit counseling agency devises an ideal repayment plan for the client, then the client cannot file for chapter 7 bankruptcy.
Filing Bankruptcy Online:
Due to the gradual increase in internet utilization, filing chapter 7 or chapter 13 bankruptcy online is preferable to traveling long distances. Therefore, declaring bankruptcy online requires the assistance of an attorney who charges for this service. In addition to submitting a court petition, the court requires a number of additional forms. However, you cannot avoid the court, as you will be required to appear in court to present your case.""
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