Is Filing for Chapter 7 Bankruptcy Right for You? Find Out
Looking to file for chapter 7 of bankruptcy? Well, before you do so, you must know that you have options. For instance, if you are in business, either a partnership or a corporation or a sole proprietorship, you may want to prefer running the business. You may not want to liquidate and shut down. In this case, you can file under chapter 11 instead of chapter 7.
Chapter 11 allows you to adjust your debts either by consolidating them or by extending repayment time.
If you are a sole proprietorship, you can qualify for filing under chapter 13 too. So can individual debtors with regular income. You can save your home from foreclosure under this chapter, as it allows you to pay your dues through a consolidated payment plan.
Points to note before you consider chapter 7
First, it is good to hire chapter 7 bankruptcy lawyer in Northern Virginia so that you get the best legal advice. An experienced legal aid by your side is a plus point during financial distress.
Second, you must first analyze your finances properly and decide whether filing for bankruptcy is the best option for you. Your lawyer can tell you about other alternative of bankruptcy such as out-of-court agreement with your creditors.
Now, if you decide to file under chapter 7, you must be aware that the court may dismiss your case if they find your debts are primarily consumer instead of business and granting you debt relief would spell abuse of the chapter.
If your current monthly income is higher than the state median, the court would conduct Means Test to find out whether allowing you to file under chapter 7 is abuse of chapter or not.
What is “abuse of chapter”?
The court presumes “abuse of chapter” when the aggregate of the debtor’s current monthly income for the last 5 years is more than 25 per cent of the non-priority unsecured debt of the debtor, so long as the amount is a minimum of $7700.
If you can overcome abuse presumption you can file under chapter 7. If not, your case will go under chapter 13 on your consent. If you do not consent for chapter 13, the court will dismiss your case.
A competent chapter 7 bankruptcy attorney will tell you the considerations before filing. That’s why it is important to associate with a good lawyer who works on your best interest and not on his/her greed.
Filing for bankruptcy is not a bad thing; of course, it may taint your financial record for a while, but it can be a stress-buster in a situation when you can’t seem to find a solution to your piling debts. Bankruptcy is the last resort. It isn’t a life-saving jacket, but it is that piece of sturdy log that you find when you are drowning in the sea of debts and are too exhausted to swim anymore. So, hire chapter 7 bankruptcy lawyer in Northern Virginia today and find out what is right for you in terms of your finances.