What You Should Know About Chapter 7 Bankruptcy in 2020

The United States is currently bedeviled by an economic crisis that has led to job losses, financial hardships, and extreme debt conditions. Many people have fallen into debt because they could not manage their little earnings. If you are such a person and you live in Miami, you can file for bankruptcy under chapter 7.

Although many persons are not comfortable filing for bankruptcy because they fear that it will affect their credit, it isn’t always the case. Consider filing for bankruptcy if you are in too much debt. Chapter 7 bankruptcies are a great option because they will help you to secure your property while getting rid of your debt. 

Your credit score won’t be damaged by this kind of bankruptcy, unlike many peoples’ fears.

How to File For Bankruptcy under Chapter 7

Chapter 7 bankruptcies are only open to some individuals and business debtors based on some requirements.

Bankruptcy lawyer will judge your state of bankruptcy based on the following criteria:

  • If your debts will take at least a 5-year repayment period
  • If you have a stable, low income
  • If you struggle to pay bills monthly
  • If you have not filed a chapter 7 bankruptcy in a 5-year-period

Benefits of Chapter 7 Bankruptcy

Filing for Chapter 7 bankruptcy in Miami holds the following advantages for you:

  • Creditors cannot take action against debtors;
  • Debtors won’t make payments to creditors;
  • You can rebuild credit in fewer time frames than other bankruptcy options;
  • Individuals can retain their properties like cars, houses, and other belongings. No Foreclosures;
  • It saves you from bank loans, credit card debt, medical bills, and other debts.

What is the bankruptcy process Under Chapter 7?

Filing for bankruptcy under Chapter 7 is quick and can take within two months of filing. To enjoy all the benefits of this bankruptcy as a debtor, here is the process you must follow.

  • Discuss with Miami Bankruptcy lawyer to check whether or not you meet the chapter 7 bankruptcy requirements.
  • If you meet the requirements, you will fill out a “Statement of Financial Affairs” form that will contain information about your income, expenses, debts, and creditor’s details. This form will also come in handy for property exemptions.
  • Your bankruptcy lawyer will present your case in a federal court where an appointed trustee cross-checks your eligibility.
  • As soon as you file the chapter 7 bankruptcy application, the court will put an automatic stay in place, preventing creditors from collecting your property while your case is ongoing. 
  • The court will direct a trustee to claim all your non-exempt properties and assess whether they are of value for selling or seizure.
  • Once the court takes charge of your non-exempt assets, the secure debts come next.

A secure debt is a debt that the creditor has the right to seize because the debtor used it as collateral. Concerning secure debts, the debtor might decide to hand over the properties to the creditor and then pay back the debt to redeem it. You can do this even after the closure of the bankruptcy case.

  • The debtor will appear in court and verify all the information provided in the statement of Financial Affairs. The court and the creditor will then agree to waive off the debts and accept the Chapter 7 bankruptcy case.
  • After at least 60 days, the court will send out a bankruptcy discharge. Between 39 and 45 days after that, another notice will go out that the case has been closed. After that notice, the automatic stay will be lifted.