With nearly 500,000 cases of Chapter 7 bankruptcies filed a year, if you’re considering filing, you are not alone. Before considering bankruptcy first consult with a Chapter 7 Bankruptcy Attorney in Tacoma WA. Some benefits of Chapter 7 bankruptcy include the following:
A New Start
Filing Chapter 7 allows for the debtor to receive a new start, a fresh start, a “do-over” if you will. Debt forgiveness absolves the debtor of responsibility for the discharged debts. It’s important to realize that certain debt types are not discharged and must be repaid by the debtor. These include alimony and child support, student loans (unless overruled), federal and state taxes, and any debt obtained through fraudulent means. Mortgage, tax, and mechanic’s liens remain after debts are discharged.
Future Income is Not Seized
Under Chapter 7 all future earnings are kept by the debtor. Generally, any property acquired after the filing date is not incorporated in the bankruptcy. However, if the debtor obtains property or money through divorce proceedings, inheritance, or proceeds from life insurance or death benefits, within 180 days of the filing date, they will be included in the bankruptcy claim.
No Debt Ceiling or Repayment Necessary
Chapter 7 bankruptcy does not set a cap on the amount of debt that may be claimed. Under Chapter 7, a debtor is eligible regardless of the amount of secured and unsecured debt. There is not a repayment plan required under Chapter 7 either. Once discharged the debtor is free from responsibility to pay the debt and creditors cannot pursue the debtor for repayment.
Credit Counseling Requirement
In an effort to ensure that debtors understand all available options, the debtor must partake in a U.S Trustee office approved credit counseling program, within 180 days prior to filing. Those exempt include the physically or mentally disabled and those serving in an active military zone. Upon completion, the debtor will receive a certificate of completion to be included when filing.
Because of the documentation required for filing bankruptcy and the criticality of correct and timely filing, it is highly recommended to seek the services of a Chapter 7 Bankruptcy Attorney in Tacoma WA. Doing so, saves not only time and peace of mind, but ensures that it’s done correctly.