Naples Chapter 7 Bankruptcy
Also known as a liquidation bankruptcy, Chapter 7 allows individuals and businesses to discharge some or all of their debt. Once debt is discharged, the borrower is no longer legally obligated to pay it. People sometimes believe the misconception that they will lose significant property if they file Chapter 7, but that is not always the case. In fact, the majority of cases are considered ‘no-asset,’ which means borrowers do not lose any property. Our Naples Chapter 7 bankruptcy attorney outlines what you need to know below.
Who Qualifies for Chapter 7 Bankruptcy?
You are only eligible to file Chapter 7 if you pass the means test. The means test compares your household income with the average income for a family of your size in Florida. The means test is intended to determine if you earn enough income to pay your debt. Individuals who do not pass the means test typically file Chapter 13 instead. If your income is below the state’s average, you are exempt from the means test. You must also complete a credit counseling course with an approved agency within 180 days before you file the petition with the court.
What Debts are Eligible for Discharge?
A Chapter 7 bankruptcy can discharge most of your consumer debt. Once your debts are discharged, the creditors and debt collectors you owe can no longer contact you trying to recover it. They are also prohibited from taking legal action against you. Some of the most common types of debt discharged in Chapter 7 cases include:
- Credit card debt
- Medical debt
- Utility bills
- Payday loans
- Small business or personal loans
- Vehicle debts
However, there are also some types of debt that cannot be discharged through Chapter 7. These include:
- Property tax and income tax debt
- Most student loans, unless you can show they are causing undue hardship
- Child support and alimony
- Debt obtained through fraudulent or false means
Should You File Chapter 7 Now?
There are many important aspects to any bankruptcy case and one of them is when you file. If you are currently facing a lawsuit, having your wages garnished, and you do not have any expensive non-exempt assets, now may be the right time to file Chapter 7.
On the other hand, if you recently received a windfall, such as an inheritance or bonus, but the boost to your financial situation will be temporary, waiting to file may be a better option. A bankruptcy attorney can inform you of other factors to consider before you file. For example, it may be best to not use your credit cards or make payments for a few months before filing.
Our Chapter 7 Bankruptcy Attorney in Naples Can Advise You of Your Options
If you have been thinking of filing bankruptcy, you should first obtain experienced legal representation. At Ronald Cutler, our Naples Chapter 7 bankruptcy attorney can help you determine if it is right for you and advise on the laws that will govern your case. Call or text us now at 386-490-9949 or chat with us online to schedule a free consultation.