How Can You Qualify For Chapter 7 Bankruptcy?
To qualify for a Chapter 7 bankruptcy, the individual must provide their attorney with six months’ worth of paychecks for themselves and their spouse – even if the spouse is not filing for bankruptcy. The paycheck stubs are then inputted into a spreadsheet to determine the current monthly income.
This information is then plugged into the “means test”, which determines if the individual qualifies for a Chapter 7 bankruptcy, or is attempting to abuse the bankruptcy process.
It is important to note that circumstances can change and affect one's eligibility for a Chapter 7 bankruptcy. For example, suppose an individual was previously making a high income but has since lost their job or become disabled. In that case, they may not initially qualify for a Chapter 7 bankruptcy, but can present this change in circumstances and provide an affidavit to demonstrate their eligibility.
The means test is an important factor in determining eligibility for a Chapter 7 bankruptcy. It is important to either rely on the results of the means test, or take the appropriate measures to override any presumption of abuse.
Will All My Unsecured Debts Be Wiped Out In A Chapter 7 Bankruptcy?
Filing for a Chapter 7 bankruptcy aims to eliminate unsecured debts, allowing the individual to focus on paying household expenses, credit, and secured creditors they wish to keep. This can provide a fresh start and help them move forward toward financial freedom.
Can I Keep My Home In A Chapter 7 Bankruptcy? What About Other Assets?
In a Chapter 7 bankruptcy, the goal is to discharge unsecured debts and allow the individual to focus on paying their household expenses and any secured creditors they wish to keep. This includes the ability to keep one's home as long as they are current on their mortgage payments at the time of filing. If an individual is not current on these payments, filing for Chapter 13 bankruptcy may be necessary.
In a Chapter 13 bankruptcy, often the primary goal is to save a home or an automobile. Filing for Chapter 13 is meant to restructure the debt in an effort to help the debtor catch up on payments. In some cases, the car note may be able to be reduced, however, this depends on the specific circumstances. Questions like these can be answered during the initial consultation with the attorney.
What Is A Trustee In A Chapter 7 Case, And What Do They Do?
In a Chapter 7 bankruptcy, the trustee's role is to review all paperwork and evaluate the case to ensure that the debtor is not hiding any assets – and that the disclosed assets are exempt according to Georgia Law. They also have the authority to take over personal injury claims and any assets that have too much equity, such as security deeds on mortgages (if they were not properly performed).
The primary goal of the trustee is to liquidate the debtor's non-exempt assets in order to distribute them evenly among the creditors. It is important to note that if there are non-exempt assets, filing for a Chapter 13 bankruptcy may be a more appropriate option.
What Are The Chapter 7 Bankruptcy Debtor's Responsibility To The Trustee?
The Chapter 7 bankruptcy debtor's responsibility to the trustee is to accurately disclose all the information required to prepare the bankruptcy petition. This includes providing paycheck stubs and tax returns, answering questions under oath, and complying with any additional requests for documents that may be required.