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Are You Eligible For Chapter 7 Bankruptcy?

The purpose of Chapter 7 bankruptcy is to get another chance by discharging your debts. However, Chapter 7 bankruptcy is not guaranteed to work. You must determine whether you qualify for Chapter 7 bankruptcy under US law. 

Participating in credit counseling is one of the first steps when qualifying for Chapter 7 bankruptcy. You can take one of these courses with a non-profit credit counseling agency. Then, you should consult a Chapter 7 bankruptcy attorney to determine if bankruptcy is the best option for you. Filing for bankruptcy costs money, and there are several other consequences of choosing to do so. 

Eligibility for Chapter 7

If you have already filed for bankruptcy, you cannot file again for several years, which depends on whether you initially filed for Chapter 7 or Chapter 13. If your previous filing was dismissed, there is a waiting period, but it is shorter.

Your finances will be scrutinized to determine if you qualify for Chapter 7. The purpose of Chapter 7 is to help those struggling with debt with no way to pay it off to have a fresh start. However, suppose you are struggling with debt but are still earning a wage. In that case, you might be eligible for a Chapter 13 bankruptcy instead.

Fortunately, a bankruptcy attorney can help you determine what form of bankruptcy you should consider filing. They will help you gather your income for the last couple of months. You'll be able to use this to determine whether you are eligible. 

How to Know if Chapter 7 Is Right for You

Even if you are eligible for Chapter 7 bankruptcy, it's essential not to be hasty because the decision to file for bankruptcy can impact you for a long time. However, in some cases, filing for Chapter 7 bankruptcy is the best option.

For example, suppose your debts are more significant than your annual income, and there is no sign that your debts will go down. In that case, filing for Chapter 7 bankruptcy makes more sense than allowing the problem to worsen. 

Filing for bankruptcy might also help you secure a loan. Because you will carry less debt, you will be seen as an attractive borrower. You'll also want to consider how long it will take to pay off your debts, even if you take extreme measures. If you would like more information, contact a Chapter 7 bankruptcy attorney.