Reviewing Chapter 7 Bankruptcy Forms

legal professionals

If you have so much debt you can never repay it, then filling out application forms for debt management, debt settlement or debt consolidation companies may not help you. With debt management, you will meet with a credit counselor to find out how you can stretch your money, pay down high credit card balances, curb your spending habits and save more money each month. With debt settlement, you will agree to pay off your creditors at a reduced amount in one or two large lump sum payments. With debt consolidation, you will pay your creditors all that you owe but in one affordable monthly payment to a third party to simplify things. If these don’t seem like viable options to control your situation, then you will need Chapter 7 bankruptcy forms.

Once you fill out your Chapter 7 bankruptcy forms, you must be prepared to lose something. While you won’t be required to pay back with cold, hard cash, some of your personal belongings may be sold by a court-appointed trustee to satisfy a portion of your debts. In the past, people would lose their vehicles and their homes, but today’s bankruptcy forms 7 allow for some leeway. You may lose second homes, second cars, boats, guns, valuable collections, musical instruments, jewelry, pets, airline miles, clothing, household goods worth $1000+ and inheritances in a bankruptcy case. Once the bankruptcy is approved, assets may be liquidated at any time but the trustee usually comes by in 1 to 3 months.

If you’re worried about losing assets after filling out Chapter 7 bankruptcy forms, then you may want to consider Chapter 13 bankruptcy forms instead. The primary benefit of choosing Chapter 13 over 7 is that this type offers you the opportunity to stop your home from foreclosing. While you will still have to make payments on your home, the bankruptcy gives you the ability to catch up on missed payments without court proceedings. The other benefit of Chapter 13 is that you can reschedule other secured debts and lower monthly payments. A Chapter 13 filing is similar to a consolidation loan, where the debtor pays a trustee, rather than the original creditors, which may be a relief if the creditor calls have gotten nasty. Also, filing Chapter 13 will protect any co-signors from sharing your financial ruin. If you’re unsure if you qualify, then you may want to speak with a legal professional about your case. Many attorneys offer free initial consultations.

Before you fill out your Chapter 7 bankruptcy forms, you may want to consider some options to save some of your assets. You can do this, legally, without hiding assets or doing anything illegal. For instance, it’s fully legal to sell off items to pay off outstanding IRS tax debt. In states with large homestead exemptions, it’s logical to pay down your mortgage to save your home. Sixty days before filing, you’re allowed to take out a credit card cash advance to pay off living expenses or lawyer fees worth $1075 or less. Money can be contributed to an annual IRA account since retirement funds are exempt. A life insurance policy may be taken out, which is also exempt. Sometimes you can also buy back some of your unprotected assets by paying off the non-exempt amount to the trustee. Declaring Chapter 7 bankruptcy is a tough decision, but the opportunity for a fresh start is a wonderful thing for many Americans.