Introduction to Chapter 7 Bankruptcy FAQs
Chapter 7 bankruptcy can be very confusing for many people. With all of the laws, rules and other regulations, it is not uncommon to get lost in all of the legal jargon. The Tempe Bankruptcy Attorneys of Ariano & Associates, PLLC realize that Chapter 7 bankruptcy poses a lot of questions, and that each and every client deserves to have questions answered and concerns addressed. While you may have quite a few questions about the process, we believe the few questions below are some of the most common questions that we receive from clients.
Do I qualify for Chapter 7 bankruptcy?
While Chapter 7 bankruptcy helps millions of individuals eliminate their debt, not every person qualifies for this type of bankruptcy. To determine if you may be eligible, your attorney will evaluate your financial situation, including, but not limited to, your income, the total amount of debt you owe, what type of debt you owe, and whether or not you may be able to handle some type of repayment plan. Most individuals who qualify for Chapter 7 bankruptcy meet what’s called an income “means test,” which simply demonstrates that they do not have the financial ability to eliminate their debt through a repayment plan. If you do not qualify, the Tempe Bankruptcy Attorneys of Ariano & Associates, PLLC will help you explore alternative methods for eliminating your debt.
How long will my Chapter 7 bankruptcy case take?
Chapter 7 bankruptcy is a rather quick process, and is one of the fastest ways to eliminate debt. Most Chapter 7 bankruptcy cases take anywhere from four to six months. There are situations where your Chapter 7 bankruptcy may take longer than anticipated, but this is all dependent upon your unique set of circumstances. Some people have more debt than others, so the four to six month time period is only a general estimate as to how long your Chapter 7 bankruptcy proceeding may take.
Can I keep my home or car during my Chapter 7 bankruptcy case?
With Chapter 7 bankruptcy, there is a way for most individuals to keep their home, car or any other important tangible property, as such property is typically considered “exempt property.” Any property that is considered exempt cannot be sold or “liquidated” in order to satisfy your creditors. Much like the time frame for how long your Chapter 7 bankruptcy proceeding might last, whether or not you can have your home, car or other property exempted is all dependent upon your unique circumstances.
Will all of my debts be eliminated at the conclusion of my Chapter 7 bankruptcy?
Any individual filing for Chapter 7 bankruptcy wants to eliminate all of his or her unsecured debt, which is simply debt that is not attached to any property (such as credit cards, some personal loans, and medical bills, for example). While most unsecured debts can be discharged as part of Chapter 7 bankruptcy, some debts cannot be discharged. These debts include, but may not be limited to, unpaid child or spousal support, unpaid student loans, debt incurred due to fraudulent conduct, and some tax debts.
Will my credit score suffer as a result of my Chapter 7 bankruptcy case?
Your credit score is affected by a variety of things regardless of whether or not you have a substantial amount of debt. Any time an agency or organization runs your credit report, your credit score may be impacted in some way. Filing for Chapter 7 bankruptcy is certainly something that is likely to affect your credit score, however, your ability to eliminate your debt through the bankruptcy process can be helpful to your credit score in the long run. If you are able to discharge your unsecured debt, and manage any debt that has not been discharged, you are showing that you are once again creditworthy. So, while your credit score is likely to take a hit when you file for bankruptcy, you can slowly build back your credit over time so that your credit score and overall creditworthiness improves. For more on Chapter 7 bankruptcy see the US Courts website on Chapter 7 bankruptcy basics.
Contact the Tempe Bankruptcy Attorneys of Ariano & Associates, PLLC Today
If you are facing financial hardship and believe Chapter 7 bankruptcy may be right for you, it is important that you consider speaking with a Tempe Bankruptcy Attorney as soon as possible. The Tempe Bankruptcy Attorneys of Ariano & Associates, PLLC truly understand that bankruptcy can be intimidating for many people. As such, we strive to ensure our clients feel as comfortable as possible about the bankruptcy process.