If a person is either not careful or unlucky, it is possible for their debts to become financially crushing obligations. Depending on the type and amount of debt that you owe, it is possible for your creditors to take extremely aggressive actions against you to collect the money you owe. Whether it is repossessing your possessions or garnishing your wages, these actions can be extremely disruptive to your daily life. To end this cycle, you may need to consider filing for the protection of bankruptcy, but if this is not a strategy that you have seriously considered, you may benefit from having the following couple of bankruptcy questions addressed before you meet with your attorney.
Can Anyone File For Chapter 7 Bankruptcy Protection?
It is fairly common for clients to assume that it is simple to file for any type of bankruptcy that can help their situation. While this would be nice, it is an unfortunate fact that the real world does not operate this way. In particular, it is common for people to want to seek the protection of a Chapter 7 filing because their assets will be at a lower risk of being repossessed or liquidated.
Yet, it should be noted that this type of bankruptcy requires individuals to pass a means test in order to receive this type of protection. The exact details governing this test are highly complicated, but it will essentially be determined by your income left over minus your essential bills. If you can demonstrate that you are unable to make the minimum required payments to the court, you will likely be granted this form of protection, and while proving that you qualify can be difficult, an experienced bankruptcy attorney, like those at Morrison & Murff, will be able to help you with this task.
Will Your Creditors Continue Collection Action Until The Bankruptcy Is Finalized?
One of the primary benefits of seeking bankruptcy protection is that this will end the aggressive and annoying attempts of your creditors to collect these debts. Yet, there are some individuals that assume this protection will only start once the bankruptcy has been finalized by the courts.
Luckily, this is not the case, and you are entitled to this protection the instance you file the initial paperwork to start this procedure. While you may qualify to have collection actions stopped, your attorney will need to file a motion with the court to have this protection instituted. However, this petition will usually be addressed in a matter of days, which can result in these actions against you coming to an abrupt halt.
Understanding what to expect when you seek bankruptcy protection is essential for making an informed decision about whether this is a sound choice for your needs. By knowing that you will have to pass a means test to qualify for a Chapter 7 filing and that collections actions against you will stop, you should possess more of the information you need to be able to effectively understand your options for escaping your crushing debts.