Chapter 7 Bankruptcy
What is chapter 7 bankruptcy?
When most people think about bankruptcy, a chapter 7 bankruptcy is probably what they are thinking about. A chapter 7 bankruptcy is one of the chapters of the bankruptcy code that allows individuals, as well as businesses, to eliminate debt without paying back their creditors.
How do I qualify for a chapter 7 bankruptcy?
The short answer to this question is to simply speak with an experienced and licensed bankruptcy attorney in the state in which you intend to file a case. However, in order to qualify for a chapter 7 bankruptcy your attorney must determine if you meet certain qualifications such as, have you received a discharge in the past 8 years; Is your household income over the allowed amount for your household size; do you have any assets that you might risk losing if you file. Because everyone's financial situation and their reason for wanting to file bankruptcy will be different, speaking to a licensed attorney is very important. An attorney can not only answer the question as to whether or not you qualify to file a chapter 7 bankruptcy but, can also determine whether or not it is in your best interest to file a case now.
Can I keep my house if a file a chapter 7 bankruptcy?
The answer to this question depends on many factors and the answer to questions such as:
In an example of a married couple filing a joint chapter 7 bankruptcy where the house is titled tenancy by the entirety, all of the equity is protected when the debt is against one spouse however, the equity may be at risk if the debt is against both spouses. When the house is jointly held, the equity is proportional and the debtor only has to exempt their portion of any equity in the house.
- Is there a mortgage on the house?
- Are you current on the mortgage and any other liens?
- Does your house have any equity in it?
- If it does, do you have room in your exemptions to protect it?
- How is your house titled?
- Does your jurisdiction use state or federal exemptions?
In an example of a married couple filing a joint chapter 7 bankruptcy where the house is titled tenancy by the entirety, all of the equity is protected when the debt is against one spouse however, the equity may be at risk if the debt is against both spouses. When the house is jointly held, the equity is proportional and the debtor only has to exempt their portion of any equity in the house.