Bankruptcy Attorney | Is Chapter 7 Right Choice?
Bankruptcy Attorney . Before you file for Chapter 7 bankruptcy, decide if it makes financial sense. You can determine if Chapter 7 is right for you by asking yourself the following questions:
Are you judgment proof — that is, are creditors legally barred from taking your property or income even if you don’t file for Chapter 7 bankruptcy?
Will Chapter 7 bankruptcy discharge enough of your debts to make it worth your while?
Will you have to give up property you really want to keep?
Depending on your answers to these questions, you may find out that Chapter 7 bankruptcy won’t help much or, in the alternative, that it is a good choice for you.
Can Creditors Take Your Wages or Property?
Most unsecured creditors are required to obtain a court judgment before they can start collection procedures, such as a wage garnishment or seizure of personal property.
If your debts are mainly of the type that require a judgment in order for creditors to take your wages and property, the next question is whether you have any income or property that your creditors can seize if they go to the trouble of obtaining a judgment. For instance, if all of your income comes from Social Security (which can’t be taken by creditors), and all of your property is exempt, there is nothing your creditors can take from you to satisfy their judgment. Often, creditors realize they won’t ever be able to collect from you, and don’t bother suing you.
However, if a creditor does sue you and gets a judgment, and then tries to take wages or property that should be protected, you will have to take action to prevent it. If this happens, contact a lawyer right away. If you have little or no income, you may qualify for free legal services. Contact your local legal aid office to find out.
If this is your situation, Chapter 7 bankruptcy is usually not necessary to protect your wages and property. However, you may still wish to file for Chapter 7 bankruptcy to get a fresh start.
Will Chapter 7 Bankruptcy Discharge Enough of Your Debts?
Certain categories of debts cannot be discharged in Chapter 7 bankruptcy. It doesn’t make much sense to file for Chapter 7 bankruptcy if your primary goal is to eliminate these nondischargeable debts. The main nondischargeable debts are:
back child support and alimony obligations
student loans, unless repayment would cause you undue hardship
income taxes less than three years past due
recent debts for luxuries (more than $650 to any one creditor incurred within 90 days before you file for bankruptcy, and cash advances of more than $925 within 70 days before you file), and
court judgments for injuries or death to someone arising from your intoxicated driving.
To learn more about these debts, see Nondischargeable Debts in Chapter 7 Bankruptcy.
Codebtors will still be on the hook. If you want to discharge debts for which you have a codebtor (such as someone who cosigned a loan for you, or a business partner who is equally liable for the debt), bankruptcy won’t wipe out the debt. If the debt is of a type that can be discharged in Chapter 7 bankruptcy, you will no longer be legally responsible for paying it, but your codebtor will. -nolo
There is a lot to consider when deciding if filing Chapter 7 Bankrutpcy is the right choice for you? Contact a bankruptcy attorney for a consultation today. Contact Jacksonville’s expert team at PInkston & Pinkston.