When to File Schaumburg Chapter 7

Not being able to pay your bills can be a frustrating and scary time. Many people wait until it is too late to do something about their situation and it can limit their options. Never let your debts sit unattended. And remember that you have several options before you need to file Schaumburg Chapter 7.

There are two different types of bankruptcy filings. Your situation will determine which version will work best for you. Your first step should be to try and find a way to pay back your debt. Chapter 13 will allow you to stop most debt collection activities in exchange for your commitment to pay creditors according to a predetermined repayment plan over a period of 5 years. This type of bankruptcy can be filed in any United States Bankruptcy Court. Chapter 13 allows you to keep your property as long as you are making payments. At the conclusion of your repayment period, most of your debts can be annulled, even if they have not been fully paid, if you followed your plan exactly. Filing Chapter 7 is a different type of bankruptcy in which you do not have a repayment plan. Chapter 7 asks the court to cancel your debts when you are unable to pay them off. Assets that are not protected would be sold off to pay your creditors.

Both types of bankruptcy require you to file in court. The filing will require you to pay a filing fee but some people qualify for an exemption. An attorney will help you to determine if you qualify. When you file, a trustee will be assigned to you. The trustee will be responsible for selling the property that becomes part of the bankruptcy and they will dispense the funds to your creditors.

If you find that you simply cannot pay your debts, filing Schaumburg Chapter 7 may be the best way to go. It will allow you to create a fresh start. Your income cannot go beyond a certain limit. In order to find out if your income will disqualify you from this type of proceeding, you have to pass a “means” test which varies from state to state. You can only file Chapter 7 bankruptcy once every 8 years so it is not an option to be undertaken lightly. It will also have a negative impact on your credit rating for an extended time.

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