Here’s an easy overview of Chapter 7 bankruptcy
It’s a common myth that bankruptcy means an individual cannot own anything again. When you are grappling with multiple debts, credit card bills, and dues, and the creditors are harassing you constantly, bankruptcy could be an option. Bankruptcy is usually the last resort, and not the first one. Chapter 7 bankruptcy is also known as liquidation, which is a good way to get rid of your debts, without paying the creditors. On the other hand, if you have considerable assets and cannot afford to lose them, you can consider Chapter 13 bankruptcy. You can click here for more information on Chapter 13 bankruptcy. In this post, we are sharing more on Chapter 7 bankruptcy.
What debts can you discharge through Chapter 7 bankruptcy?
Most debts can be discharged through Chapter 7 bankruptcy, including credit card debt, personal loans, medical bills, unpaid rent, and unsecured liabilities. Also, you don’t have to lose your home and vehicle, provided you can make payments as per the loan schedule to the creditor. There are, however, limits to Chapter 7 bankruptcy. You cannot discharge government loans, tax debt, and student loans through Chapter 7 bankruptcy. This is one of the precise reasons why you may want to talk to an attorney, to know your financial status better.
What happens when you file for Chapter 7 bankruptcy?
Soon after you file a petition for Chapter 7 bankruptcy, you will get an automatic ‘stay’. This means that you cannot be harassed by creditors for repayment of loans and dues.
Things to understand
So, do you qualify for Chapter 7? This depends on your circumstances and income. In Nevada, if your income per month is more than the median in the state, you may not file for Chapter 7 bankruptcy. If your expenses are extremely high, you may still file for Chapter 7 bankruptcy, but it depends on the facts of the case. Like we mentioned, there are other options. For people with considerable assets and a steady source of income, Chapter 13 bankruptcy may work better. Chapter 7 is best suited for those who have a considerable amount of unsecured debt, medical bills, and unpaid credit card bills. Also, when your income is lower than the state median, you may benefit from Chapter 7.
Consider meeting an attorney you know for understanding your circumstances better. Every person’s unique situation and financial position determines whether or not they can file for Chapter 7 bankruptcy in Nevada.