Can You Qualify for Chapter 7 Bankruptcy?

If you have to file bankruptcy and want to know what your best option is in terms of what type of bankruptcy you have to file then you will want to inquire about Chapter 7. Under the Bankruptcy Abuse Prevention and Consumer Protection Act passed in 2005, it is much more difficult to qualify for Chapter 7 bankruptcy as the federal government is attempting to funnel the majority of bankruptcy cases into Chapter 13 which requires repayment.

The Advantages of Chapter 7 Bankruptcy


The recently passed laws aim at making bankruptcy as less attractive of an action as possible and limiting Chapter 7 cases plays a big part. If you are eligible for and file Chapter 7 bankruptcy then you are technically not required to pay off some of our outstanding debts. Your nonexempt assets (if you have any) are liquidized and the assets are given as payment to your creditors. Any unpaid debts, with a few notable exceptions, are discharged and you are allowed to keep your exempt assets and start over.

Some of the notable exceptions to dischargeable debts after your Chapter 7 bankruptcy are:
-    Student loans
-    Alimony/child support
-    Taxes
-    Proceeds from a fraudulent or criminal activity

There are a few more non-dischargeable debts and the number and extent vary from state to state but the proof is in the pudding: if you’re eligible for Chapter 7 bankruptcy then it is probably your best option.

Learn More About Chapter 7 Bankruptcy


You will want to talk to a bankruptcy attorney about whether or not you can file Chapter 7. They will tell you about the “means test” and whether or not you qualify for protection under Chapter 7. That way you can get an idea of where you’re at and where you’re going so you can get to a debt free destination as quick as possible.

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