Understanding Chapter 7 Bankruptcies: Is It Right for You?
When you get into a financial situation where bankruptcy seems like your only option, you need to be educated on what the bankruptcy laws in Utah are and how they will affect you. You can do this most effectively by finding a Utah bankruptcy attorney in Midvale, UT who can give you the information you need to make the right choice for your situation.
There are two types of bankruptcies: Chapter 7 and Chapter 13. Chapter 13 is often considered a debt recognition program, which allows you set goals so you can pay off most, if not all, the debt you have. For many, this is the first option that is considered. However, some people cannot financially handle a debt organization plan. Instead, they’ll file a Chapter 7 bankruptcy.
What is a Chapter 7 Bankruptcy?
When most people think of bankruptcy, the idea that comes to mind is closely associated with Chapter 7 bankruptcy. In this case, most of your debt is completely discharged, though your credit will take a severe hit. However, most people, after filing bankruptcy, are able to regain their credit much more effectively when they aren’t burdened by the weight of unpaid bills.
In a Chapter 7 bankruptcy, the following debts won’t be discharged:
- Some taxes
- Some judgments
- Students loans
- And some other types of debt
When you meet with a Utah bankruptcy attorney in Midvale, UT, he or she can find out which types of debt will be discharged and which won’t so you can have an accurate picture of what debt you’ll be left with after the bankruptcy. The bankruptcy attorneys at Haskins James Law will also help you figure out if bankruptcy is really the best option for you once they have more information about your financial situation.
To Qualify for a Chapter 7 Bankruptcy, You Have to Undergo the Means Test
The courts, in order to find out whether or not you should be granted a Chapter 7 bankruptcy, will have you take a means test. A means test balances your income and assets with your level of debt to determine whether or not you would be able to pay the debt off within a certain period of time.
If the figure that results from the balance is below a certain level, the judge will likely allow you to begin the process of filing a Chapter 7 bankruptcy.
Bankruptcy can be a difficult and frightening process, but the Utah bankruptcy attorneys at Haskins James Law are here to help. Call us today!