What You Should Know About Chapter 7 Bankruptcyin Automotive

More people than ever have found themselves in financial trouble due to the pandemic and loss of employment. If you’re only getting deeper into a financial hole with no end in sight, Chapter 7 bankruptcy may be the answer. This type of bankruptcy completely discharges your debt, but there’s more you should know.

You’ll Need To Be Eligible

Once you’ve decided to file for bankruptcy, you must pass what’s called a “means test“, proving your eligibility to file based on your state’s requirements. Most people that file are well-within the guidelines. Your bankruptcy attorney Howard County MD will help you with this simple process.

Large Purchases Are Off Limits

Before you file Chapter 7 bankruptcy, you have to be extremely careful how you use your money. This is not the time to sell assets, use credit cards on lavish expenses or show preferential treatment towards one debt. The court will look at your finances for several months preceding the date you file and anything suspicious can be flagged as fraud.

Some Assets Are Exempt

There is a good chance some of your assets will be sold when you file Chapter 7. However, if you own a home that doesn’t have a lot of equity and your payments are current, you may be able to keep it. Each state has a list of exemptions and many include homes and vehicles.

It’s a Tough Lesson To Learn

Although bankruptcy sounds like an easy solution, it’s emotionally exhausting. Your expenses will be scrutinized and you’ll need to take a course in financial management. You’ll also have to change the way you think about money.

Bankruptcy Requires Discipline

Chapter 7 bankruptcy can help those in the worst of situations to get their lives back. However, it requires a lot of work and discipline. Discussing your situation with a qualified attorney is the first step towards a brighter future.