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Jacksonville, Florida, United States of America (Free-Press-Release.com) October 11, 2011 -- Filing Bankruptcy Under Chapter 7

Filing Chapter 7 bankruptcy may also include the strong protections of the Automatic Stay and Chapter 7 exemptions.
These two programs are part of the bankruptcy code in every state and help you protect your home, car, wages and other important possessions from creditors, and may prevent foreclosure.

Typically, Chapter 7 bankruptcy works best for people who:

Owe lots of credit card and medical debt. Bankruptcy is designed to completely eliminate unsecured debts like credit card and medical bills. Typically, it works quickly, meaning you don’t have to wait years for a fresh start.

Do not own much property. Chapter 7 property protections vary according to state laws, but, generally speaking, Chapter 7 offers less protection for your property than Chapter 13 bankruptcy. However, Chapter 7 exemptions may allow you to keep your home, car and other valuable items like work tools, furniture, clothes, appliances, photos and books.

Do not have much income. In order to qualify for Chapter 7 bankruptcy, you must pass the means test. A local bankruptcy lawyer can help you with this test, which looks at your income and debts to determine true need.

Chapter 7 Bankruptcy Requirements – Eligibility to file. Laws passed in 2005 set eligibility requirements for potential filers. In order to file, you must meet certain criteria, including passing the Chapter 7 means test. After you pass the test, you will also need to complete a credit counseling course.

Chapter 7 Bankruptcy Means Test – The means test isn’t like the exams you saw in school. Learn how this measure of your debts, income and assets affects your ability to file. The rules for the means test vary by state, and we provide some quick tools to give you a better idea if Chapter 7 may be able to help you.

Chapter 7 Bankruptcy Timeline – Although Chapter 7 is typically one of the fastest acting forms of debt relief, there are still many steps and stages, each requiring you to complete processes, filings or meetings. Know more about what happens, and when, during a bankruptcy case.

Chapter 11
Reorganization Under the Bankruptcy Code

The chapter of the Bankruptcy Code providing (generally) for reorganization, usually involving a corporation or partnership. (A chapter 11 debtor usually proposes a plan of reorganization to keep its business alive and pay creditors over time. People in business or individuals can also seek relief in chapter 11.)

A case filed under chapter 11 of the United States Bankruptcy Code is frequently referred to as a “reorganization” bankruptcy.

An individual cannot file under chapter 11 or any other chapter if, during the preceding 180 days, a prior bankruptcy petition was dismissed due to the debtor’s willful failure to appear before the court or comply with orders of the court, or was voluntarily dismissed after creditors sought relief from the bankruptcy court to recover property upon which they hold liens. 11 U.S.C. §§ 109(g), 362(d)-(e). In addition, no individual may be a debtor under chapter 11 or any chapter of the Bankruptcy Code unless he or she has, within 180 days before filing, received credit counseling from an approved credit counseling agency either in an individual or group briefing. 11 U.S.C. §§ 109, 111. There are exceptions in emergency situations or where the U.S. trustee (or bankruptcy administrator) has determined that there are insufficient approved agencies to provide the required counseling. If a debt management plan is developed during required credit counseling, it must be filed with the court.

Chapter 13
Chapter 13 was designed to stop to foreclosure, repossession, wage garnishments, lawsuits and creditor harassment. Chapter 13 bankruptcy works with the courts to consolidate, prioritize, repay, and, in some cases, reduce or eliminate old debts. This type of bankruptcy allows you to make one lower, interest-free monthly payment to a trustee. That trustee then prioritizes your debts and deals directly with your creditors. The duration of your bankruptcy repayment plan typically lasts three to five years.

During this time, the bankruptcy automatic stay allows most people to stay in their home and keep their possessions. After filing bankruptcy, creditors are legally prohibited from contacting your or threatening you any longer.

Should I File Chapter 13 Bankruptcy?
Unlike Chapter 7 bankruptcy, which only lets certain people file, most are allowed to file bankruptcy under Chapter 13.
If you can relate to any of the points below, it may be time to examine the Chapter 13 bankruptcy option if you:

Are behind on paying your bills and are looking for extra time to repay them
Are facing foreclosure and want to keep your home
Are facing car repossession and want to keep your cars (cars in bankruptcy)

Have debt that is the result of a temporary financial setback, like a job loss, injury or illness
Have regular income so you can make the lower, interest-free monthly payment required under Chapter 13

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