You may also be able to prove a hardship due to unforeseen circumstances or unexpected serious illness. The calculations are far too complex to discuss in the space available here, so the bottom line is that you simply have to apply for the calculation to be made and wait for the result.
When you qualify for debt relief through a Chapter 7 bankruptcy, the bankruptcy trustee appointed by the court will take possession of all of your non exempt assets. Exempt assets are defined under state laws and vary, but you should be prepared to lose some of your real property possibly including your house and car. However, all of your debts except for back taxes, payments due to criminal liability, and child support remain in force. Collection by creditors will be stayed (halted) however while the bankruptcy case is being heard.
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It is true that a bankruptcy will remain on your credit rating for up to ten years. However, the odds are that if you have reached the point of bankruptcy there has already been considerable damage done to your credit rating, so you might take some comfort in thinking that at that point a little more damage isn’t so bad. Either way, you will need to begin rebuilding your credit. Now, however, you are relieved of the majority of debts that were dragging your budget down and keeping you behind in the credit game. Buying a new car and making timely payments on it could be a good place to start.
You should also note that until the bankruptcy is discharged (meaning the bankruptcy case is closed), you are free to take action to recover assets. This would be the time to make your last attempt to find debt solutions. Your creditors might be more inclined to make a deal with you if you can show good faith in attempting to at least repay them more than the bankruptcy trustee would.
The entire process of a chapter 7 bankruptcy could take four to six months, possibly less. You will be expected to pay a filing fee and court costs. This might be lessened if your “means test” shows extreme financial hardship. As difficult as all of this may seem, keep in mind that the government did see the need to give people a fresh start in life without being crushed by debt that has gotten out of control. Take advantage of credit-yogi’s service so that you can avail yourself of all of the options that the government has made available to you under Chapter 7 of the federal bankruptcy code.
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