Qualifying for Chapter 7 and Asset Liquidation

Going into debt with no end in sight is a terrifying and disheartening experience. Fortunately, there are legal options that allow you to formally restart your finances and resolve your outstanding debts. Filing for bankruptcy is one way to take care of your serious debt problem. While the idea of declaring bankruptcy may seem like a scary or embarrassing prospect, it can actually be an extremely useful tool to help you get your life back on track.

One of the forms of bankruptcy that may be available to you is Chapter 7 bankruptcy. To qualify for Chapter 7, typically your income must be below the state median. The law also requires that you receive credit counseling from an approved credit counseling agency no more than 180 days before filing for bankruptcy. Depending on your individual situation, there may be other details that can either help or hinder your eligibility for Chapter 7. An experienced bankruptcy attorney can review your financial status and help you determine which option is most ideal for your circumstances.

Under Chapter 7 bankruptcy, a debtor is required to liquidate assets to pay back the debt that he or she owes. If a business entity is filing for Chapter 7, the business will be dissolved upon filing to cover the debts. For personal bankruptcy under Chapter 7, liquidated assets can include any property you own, with the exception of some exempt assets.

Typically your earnings, home, professional tools, and retirement accounts can not be liquidated. Other assets may be liquidated to pay off your debt. The advantage to this form of bankruptcy is that your debt is immediately resolved and you do not have to create a repayment plan. However, you may have to give up some of your property if you choose this option.

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For more information on Chapter 7 and filing for bankruptcy, please contact the experienced New Orleans bankruptcy lawyers of Kervin & Young, LLC today at 504-599-5906.