When you determine that your bills have gotten to be much larger than you can handle, you might decide to begin exploring ways that you can get a fresh financial start. One of the possibilities might be filing for bankruptcy. Chapter 7 bankruptcy is one of the options on the table for some Pennsylvania residents. Understanding this type of bankruptcy is vital for anyone considering claiming its protections.
What is Chapter 7 bankruptcy?
Chapter 7 bankruptcy is sometimes called liquidation bankruptcy because many of your assets are sold to cover your debts. Whatever money is made from the sale of those assets is used to cover the debt you owe that is eligible under the bankruptcy code. Aside from that, you won't be responsible to pay debts covered by the bankruptcy. You will, however, have to pay for the filing fees and other fees for the bankruptcy.
Can anyone file for Chapter 7 bankruptcy?
Only people who meet certain income requirements can file for bankruptcy. The income requirements are based on the current median income for the state, according to FindLaw. There are some special circumstances that might also come into play when it comes to qualifying for Chapter 7 bankruptcy.
What can I keep in a Chapter 7 bankruptcy?
You might be able to keep some property, such as your vehicle and your home, when you file for Chapter 7 bankruptcy. Property exceptions in bankruptcy have to meet certain criteria, so it is important to understand exactly how filing for bankruptcy might affect the property you want to keep.
Source: United States Courts, "Liquidation Under the Bankruptcy Code" Sep. 19, 2014