Chapter 7 is the easiest and quickest form of bankruptcy. If you have the option, this is usually the best choice. This type of bankruptcy generally takes three to six months to complete to get your debt discharged.
A Chapter 7 bankruptcy will meet your financial goals if:
- You have a large amount of unsecured debt that will not result in a loss of any of your assets.
- If all or most of your property is exempt from being seized.
- If credit cards, medical bills, payday loans, and other unsecured debt is causing most of your financial problems.
- You can pass the means test, simply that you make the same or less than the median income in your area.
Secured Debt
If you do have secured debt such as a house or vehicle, Chapter 7 may still be a good option for you if you are current on your payments. You will need to continue to pay these debts if you wish to keep the collateral.
Exempt Property
The bankruptcy laws allow you to have a property that is exempt. Household furnishings, clothing, jewelry, and equity in your home or vehicle qualify in most states. Bankruptcy is not intended to leave you homeless with no property; this would put you in a worse position than what you started.
Non Dischargeable Debt
Some debt will not be discharged no matter what type of bankruptcy you choose.
- Alimony
- Child support
- Current taxes
- Most student loans
- Fees and fines owed to government agencies
At the end of your bankruptcy case, all of your qualifying debt will be eliminated. You will no longer be legally responsible for that debt.
If you have questions on how to get financial relief and if Chapter 7 would be a good choice for you, contact a Houston bankruptcy attorney today.