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4 Bankruptcy Facts

Bankrtupcy facts to know before you file



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4 Bankruptcy Facts

4 Bankruptcy Facts

By 
We The People (Vivial)

Details Sometimes, filing for bankruptcy is a person's best opportunity to alleviate debt and get their finances back on track. However, the process can be complicated and stressful, and it's important to know as much as possible about bankruptcy before going through with it. Here are answers to a few of the most common questions about filing for Chapter 7 bankruptcy. 4 FAQ About Filing for Bankruptcy What is Chapter 7 bankruptcy? One of the most common forms of personal bankruptcy, Chapter 7 is a liquidation plan that's intended to clear as much debt as possible. In Chapter 7 bankruptcy, the appointed trustee divides your property into exempt and non-exempt, and sells everything from the non-exempt category to repay as much of the outstanding debt as possible. However, in most cases, the majority of your property counts as exempt, meaning you should lose very little in the process. What are the requirements for eligibility? In order to file for bankruptcy through Chapter 7, you must have a household income that falls below a specified threshold. In some cases, a person may make too much money to be eligible for Chapter 7 and must instead file Chapter 13. Can I keep my house? Whether your home falls under exempt property depends on many factors that vary by state. In general, if you have been able to stay current with your mortgage, you have a good chance of keeping your house. Your bankruptcy case will also take into account what types of equity the house has when determining exemption. What debts cannot be released? Chapter 7 bankruptcy is intended to wipe out as many forms of debt as possible, but there some forms will carry over. Debts for taxes that were incurred within the last few years will need to be paid. If you file for bankruptcy but owe alimony payments, you'll also be required to stay current with those.