When people are struggling with debt and are considering bankruptcy options, Chapter 7 and Chapter 13 bankruptcies are the most common types they would likely look into. A Chapter 7 case is where a debtor is authorizing the Bankruptcy Court to take and sell their non-exempt assets and give those funds to creditors. In turn, the Bankruptcy Court provides the debtor a discharge of his or her debts. In the alternative, a Chapter 13 case is where a debtor is reorganizing his or her debt into a payment plan approved by the Bankruptcy Court. Upon the completion of this payment, again, the Bankruptcy Court would provide a Discharge to the debtor.
Based on data provided by American Bankruptcy Institute, almost 2/3 of all bankruptcy cases filed are filed under Chapter 7. What are some reasons to file Chapter 7?
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Want a Fresh Start – Getting bogged down by debt is far too commonplace in our current society. People spend years and years making minimum payments and feel that they have no other options. By doing this, you’re taking money away from your future and putting it into the pockets of the creditors. However, there is another option—file Chapter 7 and get a FRESH START and take charge of your money again.
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Missing Payments – Missing payments takes a huge negative impact on your credit history. By missing payments, the creditor now has the ability to notify the credit bureaus that you are in fact missing those payments. With each missed payment, your credit score decreases. As your credit score decreases, your credit risk increases and future credit becomes more expensive. Filing for Chapter 7 can finally put an end to these missed payments and eliminate any obligation you have on those payments.
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Creditors Constantly Calling – As you start missing payments, the creditor that is owed that money grows more and more aggressive. One of these aggressive tactics is constantly call you and demand payment. The people calling are trained professionals with one goal: get money from you. These calls can get so stressful, you no longer have the patience to even answer the phone anymore. By hiring Sacramento Bankruptcy Lawyer, we can get those calls to stop immediately!
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Lost a Job – Losing a job puts an immediate toll on your finances. With the loss of your job comes the loss of your paychecks. While you might be eligible for unemployment benefits, this income will quite certainly be less than what you were earning prior. Now making those monthly debt payments is immediately a much more difficult task and unless you have a cushion in savings, this can immediately put you at risk of not having any money left to even keep up with your normal and necessary expenses. Chapter 7 allows you to eliminate the debt obligations so you can focus on your necessities.
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Reduced Income – Similar to above, when a person’s income decreases, the amount of funds they have available to satisfy their debt is now smaller. With less funds available to them, making the monthly debt payments is much more difficult. Chapter 7 loosens that stress and allows you to discharge certain obligations so you never have to worry about it again.
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Medical Issues – Studies have shown that one of the most commonalities in Chapter 7 bankruptcy cases is the fact that they accumulated medical bills that they are unable to pay. Filing for Chapter 7 can lessen the load after suffering medical bills by eliminating them in the Chapter 7 bankruptcy.
- Divorce or Separation – When people get married---or even into a relationship—it is common for them to join their finances, either fully or even partly. For example, the couple can get joint credit cards together, a joint car loan, or sign a residential lease jointly. Or one person might have better credit than the other person so all of the credit they need, they get in the person’s name with the better credit. Then, unfortunately, they break up. Now the debt still needs to be paid but their financial situation is vastly different now. Filing for Chapter 7 can alleviate this additional burden when dealing with a divorce or separation.
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Overspending – In today’s digital world, overspending has become a serious problem. With the advent of the internet and online shopping, people can buy anything they wish by pushing a few buttons on their phone from the comfort of their own home. One purchase leads to two---leads to three---so on. When you finally realize you have overspent and can’t afford the debt, you now need to make a decision to avoid future legal ramifications. Pulling the cord and filing Chapter 7 is a very plausible scenario people should consider in order clean up their finances.
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Quick Results – By hiring Sacramento Bankruptcy Lawyer, we can get your debt issues resolved and discharged in as little as 3 months. Upon hiring our office, the benefits would start instantly.
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Car Repossessed – When a car is repossessed, the lender will store it a tow yard for a period of time. Once the designated amount of time has passed, they will then sell the vehicle at an auction. Now the lender will reduce the balance owed by the amount they received from the sale. The remaining amount is an obligation that the debtor still owes and the lender can and will come after the debtor for that debt. This debt can be included in a Chapter 7 and eliminated upon the discharge being entered.
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Not Enough Income to Support Debt – The ability of paying back debt actually boils down to a simple formula: total income – total expenses = disposable income. The disposable income number is what you have left over to pay the debt down each month. Unless that number is big enough, you simply cannot pay the debt down---unless something drastic changes (i.e., income goes up or expenses go down). Thus, in those situations, a person might need to consider filing a Chapter 7 to avoid legal consequences of not paying the debt back.
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No Non-Exempt Assets – A scare that a lot of people have when considering bankruptcy, especially Chapter 7, is that they will lose certain assets---maybe a house, maybe a car, maybe something else. By filing Chapter 7, you are authorizing the Bankruptcy Court to take your non-exempt assets and liquidate them. Thus, if you do not have any non-exempt assets, this big fear is non-existent as no assets would now be taken from you in the Chapter 7.
How long is the Chapter 7 Process?
Our office provides a streamlined process to get your Chapter 7 case filed and completed quickly and efficiently. Once the case is filed, you could receive your discharge in as little as 3 months. Once the discharge is entered, the Chapter 7 case generally closes within days. Thus, by contacting our office and starting the Chapter 7 process, you can have that fresh start sooner than you could have imagined.
What’s the Next Step?
Sacramento Bankruptcy Lawyer Pauldeep Bains is ready to speak with you about whether a Chapter 7 would be a viable solution for you. Mr. Bains will analyze the facts of your situation and develop a strategy to maximize the benefits available to you.
Please CLICK HERE or call 916-800-7690 to schedule a free consultation with Chapter 7 Sacramento Bankruptcy Lawyer Pauldeep Bains.
