Dothan, Alabama
111 Adris Place
Dothan, AL 36303
(334) 673-0100

A Comprehensive Guide to Chapter 7 Bankruptcy January 2, 2019

Dothan, Houston
A Comprehensive Guide to Chapter 7 Bankruptcy, Dothan, Alabama

Nobody takes on debt with the intention of discharging it in bankruptcy someday. Life is unpredictable, and many Americans find themselves unable to pay back the money they borrowed. If you’re experiencing this situation, declaring chapter 7 could be the answer. Here's what you should know about this strategic approach for regaining your financial footing.

What Happens to Assets & Debts During Chapter 7?

Chapter 7 is often called liquidation bankruptcy because petitioners must sell certain assets to pay back creditors. These assets are considered nonexempt and might include vacation properties, newer vehicles with equity, musical instruments, valuable collections, investments, artwork, and jewelry. After all nonexempt assets are liquidated, the bankruptcy trustee will use the funds to pay back lenders.

Exempt assets are those that you may keep during the proceedings, like necessary furniture and appliances, pensions, and a portion of the equity in your primary residence.

Who Is a Good Candidate for Chapter 7?

bankruptcyChapter 7 bankruptcy is ideal for those who have little disposable income left to pay back their debts after covering the necessities. You may be a good candidate for chapter 7 if you can barely cover essential living costs.

To confirm your eligibility, the bankruptcy court will require you to pass a means test. If your annual income is less than the state’s median income for a household of the same size, you’re eligible to declare chapter 7.

It’s also wise to consider the kinds of debt you owe before filing. If your debt is comprised of revolving credit, medical expenses, and past due utility bills, chapter 7 could provide much-needed relief. If it’s comprised of child support obligations, tax debts, and student loans, declaring bankruptcy won’t provide a clean slate because these aren’t typically dischargeable.

 

If you’re thinking about filing for chapter 7 bankruptcy, turn to The Gil Law Firm for assistance. Located in Dothan, AL, this firm represents clients throughout the states of Alabama, Georgia, and Florida. For nearly two decades, they’ve been helping clients protect their financial security and aiding with personal injury suits and Social Security disability. Call (334) 673-0100 to schedule a consultation or view their testimonials online.

Other Announcements, Events and Deals from The Gil Law Firm
How to Talk to the Claims Adjuster After a Car Accident Injury, Dothan, Alabama
If you were hurt in a car accident that wasn't your fault, you may have grounds for a personal injury claim. Since insurance adjusters are trained to find even the smallest reason&nb...read more
What’s the Difference Between SSI & SSDI?, Dothan, Alabama
For individuals living with a disability, receiving financial benefits through applicable programs can make all the difference in maintaining a good quality of life. The Social Secur...read more
What Does a Bankruptcy Trustee Do?, Dothan, Alabama
Individuals who file Chapter 7 or Chapter 13 bankruptcy are expected to cooperate with their assigned trustees. This person oversees and represents the estate in question, so it...read more
What Mental Impairments Qualify for SSDI Benefits?, Dothan, Alabama
The Social Security Administration awards disability insurance benefits to individuals suffering from mental disorders as well as physical disabilities. In both cases,...read more
How to Build a Strong Slip & Fall Case, Dothan, Alabama
If you were recently involved in a slip-and-fall accident, you might be interested in filing a personal injury claim. The law protects victims in these cases, but before you can...read more