When Chapter 7 Is The Right Debt Relief Plan
Many people hope to file a Chapter 7 bankruptcy. It is seen as desirable because it can often wipe out most or all unsecured debt in just a few months. However, not everyone is eligible for this form of debt relief and it is not in every debtor’s best interest.
Before filing for any form of bankruptcy, you should take a government-mandated means test. Attorney Randall Saxton can help you complete the means test. Depending on the results, he will advise you on whether you qualify for Chapter 7. Contact Saxton Law, PLLC, for guidance.
Attorney Saxton Is Here To Answer Your Questions
In an initial consultation with Mr. Saxton, you will learn about the bankruptcy means test and receive answers to common questions such as the following:
What is Chapter 7 bankruptcy?
This type of bankruptcy is sometimes called “liquidation bankruptcy” because it may require a debtor to sell or liquidate nonexempt assets to pay creditors. Exemptions may include $10,000 of personal property and up to $75,000 in home equity.
What are the benefits of Chapter 7?
Some of the desirable aspects of Chapter 7 include the following:
- It does not require a repayment plan over time as Chapter 13 bankruptcy does.
- It is usually completed within a few months of filing.
- At the conclusion of a Chapter 7 bankruptcy, unsecured debts – such as credit card balances, medical debt and personal or installment loans – will be discharged.
Note: A debtor may be able to reaffirm secured debts, such as a home mortgage and a car loan, after the conclusion of a Chapter 7 bankruptcy. The debtor can then continue paying those debts as usual and retain ownership of their house and car.
Who can qualify for a Chapter 7 bankruptcy?
The government-mandated means test will determine whether you qualify for Chapter 7. In Mississippi, you may qualify if your family’s income is less than the mean income of other families in the state and you are unable to reasonably repay your debts. When your business is a separate legal entity, such as a corporation or LLC, you may file a Chapter 7 bankruptcy on behalf of the business.
How is Chapter 11 different from Chapter 7?
Some businesses and high-asset individuals do not qualify for a Chapter 7 but they are eligible for a Chapter 11 bankruptcy. Chapter 11 does not necessarily require the liquidation of assets. In Chapter 11, a business or a high-asset individual debtor can reorganize debt while continuing to do business. Large companies often choose Chapter 11 so they can stay operational with reorganized debt while attempting to become profitable again.
Bring Forward Your Questions And Concerns
Saxton Law, PLLC, is a trusted name in Mississippi for debt relief through Chapter 7 and Chapter 11 bankruptcy.
Saxton Law, PLLC, is a debt relief agency that helps people file for bankruptcy relief under the Bankruptcy Code.