Get the Facts Before You File Chapter 7 Bankruptcy

There are two most common forms; Chapter 7 and Chapter 13. Each has its own set of advantages and disadvantages. In this article you'll learn what Chapter 7 bankruptcy is and find out if filing for one is your best course of action.

What Chapter 7 of the U.S. Bankruptcy Code Covers

Chapter 7 or "straight bankruptcy" is generally what people mean when they think about bankruptcy. Put simply, Chapter 7 reduces your debt if you, the debtor, surrender a part of your property. During the proceedings, all assets not protected against creditors will be liquidated. There's no repayment plan involved since you'll no longer be responsible for any remaining debt not covered by the sale your assets. Your debt is "wiped clean," which means you'll have to start your life from scratch after losing possessions.

What happens in practice, though, is far different from what the law intends. About 96 percent of personal bankruptcies are no-asset cases. No property is liquidated is taken away from a debtor either because it's exempted or low-value.

Who Can Qualify for a Chapter 7

Debtors who file for this type of bankruptcy should first consult with a Chapter 7 bankruptcy lawyer. That's because you have prove you're earning more than the state-specific median income in order to qualify. A lot of debtors have passed the new Means Test. The hardest part, however, is in gathering the information required to qualify. Working with a Chapter 7 lawyer can definitely speed up the process.

Those deep in debt may want to try qualifying. An article at CNN Money describes this form of personal bankruptcy as "the best option for consumers saddled with insurmountable debt."

What to Watch Out for When Filing

Filing for bankruptcy is one of the biggest decisions that can either revive or ruin your finances. Credit counseling agencies and lawyers that can financially benefit from your position may slow down the process or may put you at a disadvantage. Talking to someone who has gone through this can give you a glimpse of the process.

Learn from their experience and talk it through with your partner and anyone who may be affected by the bankruptcy filing.

As always, consulting with a Chapter 7 bankruptcy lawyer can save you from unexpected legal consequences. A good lawyer can even point you to alternative solutions or actions to take before filing for a bankruptcy.

Tips for Finding the Perfect Bankruptcy Attorney

Filing for bankruptcy can be a daunting process, but it doesn't have to be one that you face alone. Trusting the expertise of a bankruptcy attorney can help you navigate legal complications and avoid common pitfalls. By allowing an attorney to guide you through the process, you're making your filing for bankruptcy efforts easier and more likely to succeed. Regardless of whether you apply for a Chapter 7 or Chapter 13 bankruptcy, it's usually in your best interest to seek advice from an attorney.

The Right Choice

However, there are many options available and it can be difficult to find the perfect bankruptcy attorney for your situation. Finding one that meshes with you personally and has the experience needed to successfully guide the case can be a challenge. Since a bankruptcy attorney can come with considerable fees, it's crucial to find one that you like and trust before hiring him.

To find the perfect bankruptcy lawyer, consider:

•Asking friends and family members. Yes, Google exists - and for good reason! But the referrals and recommendations from your family and friends should be trusted and can offer good connections that can help you in your case.

•Seeking a specialist. Don't just seek any lawyer. Bankruptcy attorneys have proven expertise in the bankruptcy process and law. They can help you as you're filing for bankruptcy and can also give you advice as you recover financially.

•Contacting your state bar association. If your family, friends, and internet searches don't leave you with any stand-out leads, consider contacting your state bar association to ask for lawyer referral services. You can find reviews and complaints about attorneys.

•Taking advantage of the free consultation. Most bankruptcy attorneys offer free consultation to talk about your case. Instead of completing this over the phone, try to see the attorney in-person. You'll be able to feel the personal connection as well as determine whether or not you trust him. This also gives you a glimpse of what it will be like to work with this particular lawyer, and you can compare him to other bankruptcy attorneys that you've visited and considered.

•Referrals from other lawyers, bankruptcy court. If you've used a lawyer for anything else, feel free to contact him for a bankruptcy attorney referral. Most professionals are well connected within their industry and can give you insight as to whom to trust. A bankruptcy court could be a great place to seek information as well.

Once you consider all of these tips to find a good bankruptcy attorney for your case, filing for bankruptcy will be easier than you thought possible! A bankruptcy attorney will help you complete all of the necessary paperwork as you're filing for bankruptcy as well as represent your case with specialized skills.