While no adult sets out in life thinking they will eventually need to file for bankruptcy, at times, overspending and unexpected events may make it the best decision for a person to start fresh, and moving through the process may be made more straightforward when enlisting the help of a bankruptcy lawyer Champaign IL people recommend. There are several steps to choosing bankruptcy, qualifying for Chapter 7, filing for bankruptcy, and resolving the process.
Deciding to file for bankruptcy is not something that should be taken lightly, as Pioletti Pioletti & Nichols can share that sometimes bankruptcy is the most appropriate option for people who are struggling with debts that they are unable to pay. The process for Chapter 7 bankruptcy will include the following:
Realizing It’s Time to Assess the Options
Bankruptcy is a significant decision a person may need to make in their lifetime. However, it’s essential to carefully assess available options before proceeding with bankruptcy. Being unable to pay debts, receiving calls from creditors, facing possible property foreclosure, and not having enough to live off of every month are all key reasons to evaluate your financial situation. While bankruptcy may be the most viable option, it may be possible to circumvent bankruptcy by considering alternatives, such as debt reconsolidation, negotiating down debts, debt management plans, and more.
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Qualifying for Chapter 7
Chapter 7 is known as a full liquidation, meaning that all unsecured debts are discharged through the process. The automatic stay is granted upon filing, halting creditors’ efforts to collect debts temporarily. Typically this allows for tremendous relief and the opportunity for debtors to sort out their next steps. However, it’s essential to be aware that to file for Chapter 7, one of the initial steps forward will be to qualify for Chapter 7. First, the debtor must engage in credit counseling within 180 days of filing for bankruptcy. Next, they must pass the means test, which ultimately means their income falls below the state median average.
Taking the First Step
Once a person has decided to move forward with facing their debts and working towards a solution, the first step will be to speak with an experienced lawyer. Once all options have been considered, filing a petition for Chapter 7 may be a step in the right direction. The process begins with filing the proper paperwork, which will require information regarding income, expenses, assets, debts, a certificate of credit counseling, and more. After the petition is filed, a trustee will be appointed to oversee the case. The resolution comes with the meeting of the creditors, where the debtor will be required to answer questions regarding their debts. In addition, debtors will also be required to complete their second debtor’s education course. Finally, the non-exempt property will be liquidated to pay debts, and any remaining debts will be discharged, completing the process.
While bankruptcy can impact a person’s credit score, over time, it is possible to rebuild credit after bankruptcy. Although it can take time for this to happen, with diligence and sound financial judgment, it’s possible to start fresh and have a better outlook on the future. Dealing with debts can be profoundly overwhelming, and Pioletti Pioletti & Nichols recommends that debtors speak with a Champaign IL bankruptcy lawyer to gain a holistic understanding of their options.
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