Bankruptcy can help a Lehighton resident who is behind on their bills and who cannot find the extra income to get caught up. It can help individuals take control of their financial health and work down their debts so that they may have better control over the bills they do maintain. There are a variety of different forms of bankruptcy that debtors may choose to pursue and one of the most utilized of them all is Chapter 7 bankruptcy.
Chapter 7 bankruptcy involves liquidation with is the selling of one’s assets. Once a person sells off items of property then the proceeds of the sale are used to pay their creditors. Although Chapter 7 can be an effective tool to help some individuals get back on their feet it is important for readers to understand that not all will qualify for the process.
For example, debtors who have income that they can use to pay off their creditors likely will not qualify for Chapter 7 bankruptcy. Chapter 7 is truly for individuals with no means of income to dispose of. Additionally, if a debtor’s income is over a certain threshold they may be precluded from the Chapter 7 bankruptcy process.
Additionally, if it is found that a debtor engaged in fraud in order to avoid paying off debts such as credit cards or loans then they may be kept out of the Chapter 7 process. The failure of a debtor to undergo credit counseling or the recent completion of a prior bankruptcy may also close the door on a debtor’s plan to use Chapter7.
Bankruptcy cases are unique and readers who want to learn more about this important form of bankruptcy should discuss their questions with their own attorneys. This post is only a review of some of the ways a debtor may be precluded from Chapter 7 bankruptcy and should under no circumstances be read as legal advice.