Chapter 7 Tips

Chapter 7 bankruptcy is a liquidation type of bankruptcy. This means that many of your assets will be sold off and the money raised will be applied to pay off your debt. Some of your assets may be exempt from liquidation, it depends on your situation. Any debt that cannot be paid off will be discharged, which means you will no longer be liable to pay it. If you are considering filing Chapter 7 bankruptcy, here are a few tips to consider in the process.

  1. Hire experienced Chapter 7 lawyers. Although Chapter 7 is less complicated than Chapter 13, you could lose money if you do not include debts or if you liquidate an asset you would have been eligible to keep. For a simple Chapter 7 bankruptcy, it should only cost a few hundred dollars, and hiring a Chapter 7 bankruptcy attorney will save you money in the end.
  2. Get your paper work organized! You need to be able to prove every thing in a bankruptcy Chapter 7 hearing. Make sure you have collected paycheck stubs for the last few years, tax returns for the last two years and all financial documentation such as retirement funds or investments. You should also get a budget together and figure out how much you spend each month and on what. Make a file and keep it organized to reduce your stress during bankruptcy filing.
  3. Try to cut back on spending before you consider filing. Bankruptcy is not an easy route to a debt free life. There is a means test done by the courts to determine if you are eligible to file for bankruptcy. You will need to prove to the courts that you have tried to make your payments on time but cannot. If you are not filing bankruptcy in good faith, you could be barred from filing or pushed into Chapter 13 bankruptcy where you will have to pay off most of your debt.
  4. There are some types of debt that cannot be discharged in any type of bankruptcy. Do not expect that child support, back taxes or student loans debts will be lowered or discharged. These types of debts will have to be paid in full no matter what. However, filing for Chapter 7 will eliminate the rest of your debt, freeing up your budget to make these payments.
  5. Be careful if you have co-signers on any of your debts. If you had someone co-sign with you on any of your debts, you could still leave them liable for making the payments if that debt is included in your bankruptcy. Consider filing Chapter 13 or leaving the debt out of your Chapter 7 bankruptcy if you have a co-signer.
  6. Take a deep breath. Filing for bankruptcy in Miami is a very stressful process to go through. Just keep in mind it will be over and you will be able to lift all of that debt and stress from your shoulder.