The Chapter 7 Bankruptcy.
Chapter 7 bankruptcy is the type of discharge that most people associate with the idea of bankruptcy. Chapter 7 is also the option that most people commonly choose because it offers a fresh financial start without the obligation to repay the debts that the debtor has incurred.
Filing for Chapter 7 individual bankruptcy places is ideal for people who have no way to repay the huge amount even with a repayment plan. However, according to the law, bankruptcy involves a variety of options and guidelines to help people make an informed financial decision. Contacting Eric Ollason, Attorney at Law, a bankruptcy law firm in Tuscon can make this process easier.
Although Chapter 7 bankruptcy provides many people with bankruptcy alternatives and a new beginning concerning their finances, it is not a panacea for their problems. The courts do not just grant a complete discharge for debts without fully investigating the circumstances surrounding the debt. People who file for a discharge are obligated to undergo a “means test,” which is a comparison of the person’s monthly income to that of the state’s median income.
Due to the new law, bankruptcy petitions are subject to greater scrutiny than in previous years and they require the signature of a lawyer. Bankruptcy filings in the past year also affect the status of one’s petition according to the new guidelines. This helps the courts to decide if the person is even eligible for a complete discharge.