When you are tossing around the idea of using Chapter 7 bankruptcy, it is important to fully research, analyze, and evaluate this branch of bankruptcy before you use it. To do this, you should meet with an experienced lawyer and be prepared by having a list of questions ready for this visit. Among your questions might be the following three that many people have when they are considering Chapter 7 bankruptcy.
Will you lose your house?
If you are a homeowner and want to file for Chapter 7 bankruptcy, you should ask your lawyer if you will be allowed to keep your house if you file. The answer to this could be yes or no, and it will depend on the following things:
- If you are current on the payments
- The difference between how much the house is worth and the amount you owe
If you are current on the payments and do not have a large amount of equity, then you should not experience any problems keeping your home. In other words, you should not have the risk of losing your house. If you are behind on the payments or if you have a lot of equity in the house, you might end up having to surrender your home in your bankruptcy case.
Will you lose your tax return?
The second question you might have is whether you can keep your next tax return or not. The chances of the trustee allowing you to do this are low, as most people will be required to surrender their next tax return in exchange for the forgiveness of debts. If you are expecting a tax return in the upcoming year, you will likely lose it if you file for Chapter 7.
Will your creditors have any right to come after the debt you owe?
Another question you might have is whether your creditors can come after you for debts you owe. The first thing to know with this is that your creditors will stop all collections as soon as you file, and this is the result of the automatic stay you receive from filing. If the bankruptcy case offers you a discharge of debts, your creditors cannot come after you for payment of this money. If debts are not discharged in your case, your creditors may come after you for it once the case closes.
If you have questions like these ones, or if you have other questions, talk to a lawyer. A bankruptcy law firm can give you the answers you need before you decide whether to file for Chapter 7 bankruptcy.
