By having a chapter 7 bankruptcy checklist you’ll be able to make sure you’re prepared!
Although it is becoming more difficult to file Chapter 7 Bankruptcy, it is still worth consideration in the event that you are possibly able to receive approval to file this type of bankruptcy. * Chapter 7 bankruptcy checklist below. *
Many people operate under the false assumption that Chapter 7 is a better way to file bankruptcy than Chapter 13 because the court effectively wipes out their debts and they are not required to pay them back.
This is true only to a certain degree. It is important to keep in mind with Chapter 7 Bankruptcy, also known as Liquidation Bankruptcy, that you must turn your personal property over to the court in order for it to be sold and the proceeds used to pay off your debts, or at least a portion of your debts.
Unlike Chapter 13, there is no repayment plan. This means that creditors no longer have the ability to pursue you for payment; however, the bankruptcy will remain on your credit record for 10 years. As a result, it is possible that you will be denied credit during that time period.
Chapter 7 bankruptcy checklist
To file Chapter 7, you must turn over the following information to the court.
1. A list of all creditors and the amount of each claim
2. The source, amount and frequency of your income
3. A list of all your property
4. A detailed list of all your monthly living expenses including food, clothing, shelter, taxes, utilities, transportation, medicine, alimony, child support, etc.
New bankruptcy laws were passed in 2005 regulating who is allowed to file for Chapter 7 Bankruptcy and who is not allowed to file for it, thereby leaving only Chapter 13 Bankruptcy as an option. In order to file for Chapter 7 Bankruptcy your income must be below the median income for the same size family in your state or you must proceed through what is known as a bankruptcy means test. The latter places extremely strict restrictions on your spending.
Now in many cases you will be allotted about $200 per month for food and less than $800 to spend on housing and utilities per month. In most cases, if the court sees that you have $100 per month or more in disposable income (according to their guidelines) then you will be required to file under Chapter 13 instead of Chapter 7.
In addition, it is possible that not all of the debts may be discharged under a Chapter 7 Bankruptcy filing. Certain taxes, debts for certain education over payments or loans, child support, alimony and debts for death or personal injury as well as debts for criminal restitution orders are not discharged and the you will continue to be liable for them.