Bankruptcy Chapter 7 | Consumer Liquidation

Know widely as “liquidation” or “straight bankruptcy”, Chapter 7 bankruptcy provides filers with protection from their creditors and relief from many of the debts that have overwhelmed and burdened them. It will allow you to clear most of your outstanding debts quickly and get a fresh start in your financial life.

To qualify for a Chapter 7 bankruptcy you must make less than the median income for people in your area. If you income is above the medium income leveling your area, you may still be
Eligible for Chapter 7 protections, but you will have to undergo a means test to determine how much disposable income you have.

To determine this, your monthly expenses for rent, utilities and payments on items not included in the bankruptcy will be deducted from your monthly income. 60 to see how much money would be available to pay your unsecured creditors over five-year period then multiply your disposable income. If this total is $10,000 or more, you will not be eligible for Chapter 7 bankruptcy and will be required to enter a Chapter 13 bankruptcy repayment plan. If your dispersible income totals less than $10,000 in a five-year period, there is still a more to the means test. If your disposable income is less than $100 a month, you will qualify for Chapter 7 bankruptcy protection.

Under Chapter 7 bankruptcy, you will have the ability to keep all of your exempt assets. Exempt items differ from state to state. Generally they will include retirement savings in approved pensions, 401K and individual retirement accounts (IRA). They often include a homestead, vehicle and personal items. Speak to your Zhou and Chini attorney about which assets are protected under the bankruptcy laws in your state.

Some debts are not eligible for discharge in bankruptcy. Child support payments, student’s loans and most tax debt will not be discharged in bankruptcy.