If you face overwhelming debt and constant collectors' calls, you need to know you have options for help. Filing for bankruptcy can help you get relief from debt while keeping the property you need to continue living and working. Chapter 7 bankruptcy is the most common type of personal bankruptcy filing. Its main advantages include a relatively quick process and getting to keep essential property such as your house and car as per federal and New Hampshire exemption rules.
How does it work?
Filing for Chapter 7 can be an effective way to deal with mounting credit card debt and medical debt. If the court accepts your filing, it will appoint a bankruptcy trustee. The trustee will sell off most of your property and use the proceeds to pay off your debts. In many cases, this will mean your creditors will accept less than what is due to them. Once this process is complete, your debts will be discharged and you will not owe any more money on them.
Not everyone qualifies to file for Chapter 7. The basic requirement is based on your income, which should be less than your state's median income after deducting essential expenses such as taxes, childcare and health costs. If, after these deductions, your income still exceeds the state's median, the court may deny your filing or convert it to Chapter 13.
What can I keep?
An important benefit of Chapter 7 is getting to keep key property. In most cases, you will be able to keep the house you live in along with items such as furniture, bed linens and dishes. You can also keep jewelry items below a certain value, and you can also retain your car, provided it is relatively inexpensive. Other items deemed essential enough for exemption from the bankruptcy estate are tools you need for your job, retirement funds and some types of benefits.
Which debts will I still have to pay?
If you are thinking about filing for bankruptcy, you should also be aware that Chapter 7 does not discharge certain types of debt. Notably, this type of bankruptcy does not address secured debts and government debts, such as mortgages, car payments, child support, student loans and most types of tax debt.
Do I need a lawyer?
Filing for bankruptcy can be complicated. Even without any hiccups along the road, this process requires a lot of paperwork and several court appearances and meetings. A qualified attorney can handle the process efficiently, address any problems that come up and protect your interests. Speak with a knowledgeable lawyer near you to find out if Chapter 7 is right for you and to learn about the best options for handling your debt.