Chapter 7 Bankruptcy on Maui
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If you can’t keep up with your credit card payments and loans, then filing Chapter 7 Bankruptcy can be a brilliant idea for you. This is one of the best options for people who have limited income. But if your disposable income is greater than the minimum amount allowed under Chapter 7, then we can explore a Chapter 13 Bankruptcy option with you as well.
What happens when you file for Chapter 7 Bankruptcy?
It discharges most of your unsecured debt including the credit card debt, medical bills, and even personal loans. Most of the bankruptcy cases on Maui are under Chapter 7. And the most encouraging aspect is that your debts will be discharged in a matter of months.
To qualify for the Chapter 7 filing, the debtor has to pass a means test. This test examines the financial records of the person which includes income, regular expenses, secured and unsecured debts.
The test requires you to fill a 9-page form which asks for several documents related to your finances. The main focus of the test is on determining whether you have enough disposable income to repay your debts or not. The disposable income is the amount that you have left after covering your living costs.
You can only file the Chapter 7 Bankruptcy if you don’t have enough income to pay back a minimum amount of 25% of your unsecured debt.
Don’t Believe The Myths:
Deciding to file for bankruptcy can be a dilemma for many people. And to make the experience worse, people get surrounded by some common myths related to filing Chapter 7 bankruptcy. But you don’t have to believe them blindly.
Myth #1)-Losing Everything and Exemptions:
Many filers believe that they will lose everything. This couldn’t be further from the truth. Instead, the no-asset rule states that the debtor won’t have to give up any of his/her possessions as long as the value or equity in his/her property falls below the allowable exemptions. Exemptions allow the person to retain their primary assets which they need for the day-to-day life and restart their financial life after their debts are discharged. You get to keep your house (up to certain limits), computers, cars, and other equipment that you might need to work. In 99% of all cases in the United States, a debtors’ assets are below the exemption threshold, and therefore they lose nothing.
The particular types of property that are exempt under Chapter 7 Bankruptcy include:
- Home equity worth $22,975 per person
- Reasonable and necessary clothing
- Necessary Household goods and furniture
- Household Appliances
- Jewelry up to a certain amount
- Social security, public assistance, and other public benefits
Myth #2)-Bankruptcy Means Personal Failure:
No, you don’t have to think that if you are filing for bankruptcy that it means that you have some character flaw. It is a financial remedy which is designed to account for the unforeseen events in your life. These conditions are unpredictable, and hence no one is to blame. You will find it shocking that more than half of the Bankruptcy cases in America are due to overdue medical bills.
Myth #3)-Bankruptcy Ruins Your Financial Future:
Chapter 7 bankruptcy will remain on your credit report for 10 years, but this does not mean in the slightest that you will not be able to obtain new debts for 10 years. We offer a free service to our bankruptcy clients called “720 Credit Rebuild Program.” We help you rebuild your credit after you have filed to a very high score, and if you follow our steps we can return you to a sound credit profile in a year or two.
As well, most of our clients’ credit standing is already ruined by the time they contact us, and ironically the bankruptcy will rehabilitate your credit faster than almost anything else you could do. It zeroes out your report and allows you to reclimb the credit score ladder without out all the old baggage.
Myth #4)-Paying off Debts is Better:
This surely seems like a good idea, but if you have debts which sum up more than 20%, 30% or 50% of your annual income, then there is no way that you will be able to pay the debt within a reasonable period of time, much less at a rate that your creditors demand. Thus, filing for Chapter 7 bankruptcy is undoubtedly a better idea than expending all your income, retirement accounts, personal savings and/or property in order to battle against bright neon letters flashing that this it is not a winnable war.
Advantages of Filing Chapter 7 Bankruptcy on Maui:
Whether or not to file Chapter 7 Bankruptcy is a big decision, and shouldn’t be taken lightly. So, here are some advantages of Chapter 7 that will help you to have a better understanding.
- It prevents lenders or creditors from taking aggressive and forceful action to collect the debt.
- Chapter 7 will stop cold any lawsuits, foreclosures, car repossessions and allow you to decide what the best plan of action is to keep or surrender things that you can’t afford.
- The case will force you to become more disciplined with your debt habits. If you ever plan to take out a debt soon, then you will feel more responsible and take better measures to make sure you don’t get in over your head again.
- Chapter 7 Bankruptcy can protect your property, bank accounts, and wages—permanently.
When your attorney files for the Chapter 7 Bankruptcy, you will have to appear at one mandatory meeting. After that, in the huge majority of cases there will be no further hearings, and your case will be over in a few short months.
No Relief from All Debts:
Generally, debts such as recent taxes, alimony, child support, and student loans won’t be forgiven under Chapter 7 bankruptcy. Generally, you will eventually have to pay these types of debts.
Give us a call today, so we can explore how filing a Chapter 7 bankruptcy may work for you!!!