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  • All You Need to Know About Chapter 7 Bankruptcy

    All You Need to Know About Chapter 7 Bankruptcy

    Call: 888-297-6203

    People with limited income who have accumulated a huge amount of credit card and personal loan debt have the option of filing for bankruptcy under Chapter 7. Dallas based bankruptcy law firm Recovery Law Group lawyers elaborate that in this liquidation bankruptcy, your non-exempt property is sold off to repay your debts. In case you wish to protect your assets, Chapter 13 bankruptcy is a better option. This type of bankruptcy is known as a reorganization plan, where, in a court-approved repayment plan is used to pay off your debts over 3-5 years’ timeframe.

    What effect does Chapter 7 bankruptcy have on your life?

    Filing for bankruptcy has an adverse effect on your credit score. Bankruptcy stays on your credit report for 7 years in the case of Chapter 13 and 10 years in the case of Chapter 7. However, over time, this negative effect decreases, and your credit score improves. The various concerns people have while filing for bankruptcy include:

    • Can you lose home and your possessions on filing for Chapter 7 bankruptcy?

    The federal and state exemptions allow you to keep your property up to a fixed dollar limit. In case you have property exceeding your exemptions, the non-exempt property is sold off to pay your debts.

    • What property can be kept during a Chapter 7 bankruptcy filing?

    Exempted property limit is capped. Bankruptcy filer can choose between state and federal exemptions (if it is allowed in their state). The various federal property exemptions include –

    • Homestead: $23,675 of equity can be retained in-home, burial plots or mobile homes. You can use this entire amount to protect your home or use up to $11,850 for any other property.
    • If your home equity is less than $23,675, your home might not be sold off, though a lender may foreclose if you are behind mortgage payments. If your equity is more than $23,675; the house is sold, you receive the exempted amount and the remaining amount is used to pay off debts.
    • Motor vehicle: up to $3,775.
    • Personal property: $600 per item (books, pets, musical instruments, appliances, ) with total exemption up to $12,625.
    • Health aids: completely exempted.
    • Retirement accounts: entire savings of 401(k) or 403(b) and IRA savings up to $1,283,025.
    • Jewelry: up to $1,600.

    Married couples can double the exempted amount by filing bankruptcy together.

    • Who can qualify for Chapter 7?

    A person can file for Chapter 7 bankruptcy if their income is less than the state median for household of a similar number of members. If your income is more than the state median, you need to pass the means test. In this case, your disposable income is calculated, deducting all necessary expenses (food, household needs etc.) from your income. If this amount after multiplying by 60 is less than $7,700 then you can file for Chapter 7 bankruptcy. If this amount is between $7,700 and $12,850, then your ability to pay at least 25% of your unsecured debts is assessed. If you have enough disposable income to pay for 1/4thof your unsecured debts, you are eligible for Chapter 7 bankruptcy.

    • What happens if you fail the means test?

    People whose income is more than the state median are required to take the means test. If their disposable is above $12,850, they are not eligible for this chapter of bankruptcy and need to file for Chapter 13.

    • Is Chapter 7 better than Chapter 13?

    Chapter 7 bankruptcy is ideal for those who have limited income add want to get rid of debts. In the case of chapter 7, equity in the non-exempt property is sold off to repay your creditors. On the other hand, people who have huge amounts of debts and wish to protect their property should file for Chapter 13 bankruptcy.

    • Which debts are eliminated on filing for Chapter 7 bankruptcy?

    Secured debts such as those protected by assets like a car or home cannot be discharged in bankruptcy. Additionally, certain debts like a student loan, alimony, child support, tax debts, etc. are also not eliminated after bankruptcy. However, unsecured debts like credit card bills, personal loan, medical debt are discharged, within 4 to 6 months in the case of Chapter 7 bankruptcy.

    If you are facing financial issues and struggling to make ends meet, it is important to consult experts. You can contact experienced bankruptcy lawyers at 888-297-6023 to discuss your case and eventually file for bankruptcy. They will guide you through the procedure of filing for Chapter 7 bankruptcy, provide you qualify for it. Filing for bankruptcy under Chapter 7 costs $335 which can be paid in 4 monthly installments (after seeking permission) or the fee waived off depending on circumstances.


      *Are you more than 60 days past due on your mortgage?

      *Do you own a home?

      Are you currently working?

      By clicking “Submit”, whether I do or do not purchase any products or services on this website, I hereby give my express written consent to receive calls and SMS/text messages, including calls and SMS/text messages made and sent using automated dialing equipment and/or pre-recorded or artificial voice technology and email, about offers and deals that I wish to be kept informed about from (“Partners”), at the phone number and/or email address provided on this form, including any wireless numbers provided, even if I have previously registered the provided number on any Do Not Call Registry. If I do not make a purchase on this website, it is expressly understood that the Partners retain permission to contact me as specified earlier in this paragraph. Carrier SMS/MMS and data messaging rates apply. I also agree that by clicking “Submit” that I agree to the Privacy Policy and Terms and Conditions.

    • What to Expect After Bankruptcy Discharge?

      What to Expect After Bankruptcy Discharge?

      Bankruptcy is an excellent way to get rid of huge debts which make you live between pay cheques. If you are struggling with paying your bills and making ends meet, you should consult expert bankruptcy lawyers at 888-297-6023 to find viable methods of getting a fresh financial start. According to Dallas based bankruptcy law firm https://bankruptcy.staging.recoverylawgroup.com/, bankruptcy through Chapter 7 or Chapter 13 bankruptcy is an excellent way to not only get your debts discharged but also get some peace of mind. With bankruptcy filing, you can put a hold to collector actions and end up getting rid of huge financial debts. The various benefits that are associated with getting your bankruptcy discharge include:

      • No more debts!

      When you file for bankruptcy any unsecured non priority debts such as credit card bills, personal loans or medical bills can be discharged after bankruptcy. Most people end up accumulating a huge amount of these debts over a course of time which can often result in bankruptcy. Though you might have to still pay for your secured and priority debts, a major chunk of the financial burden is removed after bankruptcy. You no longer need to worry about these debts.

      • Improved credit ratings

      Many people worry that their credit rating will take a hit post-bankruptcy. The fact is, that your credit rating is affected but it is not permanent. With time and continuous efforts on your part, you can improve credit rating. Moreover, since most non priority unsecured debts are discharged after bankruptcy, your chances of catching up on payments are better.

      • Get financial stability

      Once you get your bankruptcy discharged, you start working towards getting a better credit score. This often means, saying no to unnecessary expenses and living a relatively frugal life where you spend only on necessary items. In a way, your money is being put to sensible use. Over a period, you not only improve your credit rating but also end up saving enough money to start building assets.

      Though people may find paying a deposit for getting a secure credit card tedious and irritating, it is essential to cultivate a habit of spending only when it is necessary. Thus, in a nutshell, bankruptcy serves as a necessary push in the right direction for many people. Ultimately, you can find a financial stability which will help you secure car or mortgage loan. People can convert the social stigma of bankruptcy into a way to push their life in an appropriate direction.


        *Are you more than 60 days past due on your mortgage?

        *Do you own a home?

        Are you currently working?

        By clicking “Submit”, whether I do or do not purchase any products or services on this website, I hereby give my express written consent to receive calls and SMS/text messages, including calls and SMS/text messages made and sent using automated dialing equipment and/or pre-recorded or artificial voice technology and email, about offers and deals that I wish to be kept informed about from (“Partners”), at the phone number and/or email address provided on this form, including any wireless numbers provided, even if I have previously registered the provided number on any Do Not Call Registry. If I do not make a purchase on this website, it is expressly understood that the Partners retain permission to contact me as specified earlier in this paragraph. Carrier SMS/MMS and data messaging rates apply. I also agree that by clicking “Submit” that I agree to the Privacy Policy and Terms and Conditions.

      • Find Out How Bankruptcy Help You Get Rid of a Personal Guarantee

        Find Out How Bankruptcy Help You Get Rid of a Personal Guarantee

        Ever for the reason that 2008 housing crisis, obtaining a private loan is more complicated than it was—basically because economic institutions have tightened their lending standards. to enhance the odds of getting a mortgage, you can ask a person to be a guarantor (an person or company that pays an responsibility if the borrower fails to achieve this). Or, if you’re making use of for a commercial enterprise mortgage, you may conform to assure the mortgage with your personal property. If the non-public assure comes due, and the guarantor doesn’t have the finances to pay it off, in a few cases the assure can be worn out (discharged) in financial disaster.

        What Happens When the Borrower Defaults on a Guaranteed Loan?

        If you default to your loan (typically by missing a payment), the lender has the proper to invite the guarantor to soak up the bills or to repay the mortgage. At that factor, the guarantor is issue to the same collection activities you will face underneath nation law: phone calls, letter needs, lawsuits, or even garnishment and assets seizures.

        Just due to the fact the bank turns to the guarantor doesn’t suggest that you may be off the hook, but. The lender can pursue you till the loan is paid in complete (or you discharge it in financial disaster). also, if the guarantor pays the debt, the guarantor also can seek repayment from you. however, filing for financial disaster will probably cut off the guarantor’s right to recover towards you, as nicely.

        Who Can Be a Guarantor?

        Pretty much any inclined character can agree to guarantee a mortgage was taken out through a person else. In fact, most of the time while the borrower is an individual and the money is for non-public or instructional purposes, the guarantor is a discern, any other relative, or an excellent friend.

        Additionally, creditors often require a person to for my part guarantee a loan taken out with the aid of an enterprise (frequently due to the frequency in which small groups fail). The guarantor will publish to a credit score check at the least as rigorous because the borrower’s, have enough earnings and assets to pay the loan lower back if that turns into essential.

        In a few institutional lending programs, like student loans and small business loans, banks and other monetary establishments make the loans, however the guarantor is the federal or country government. in case you default, the authorities enterprise pays off the bank and takes ownership of the mortgage. you will then need to cope with the authorities agency to rehabilitate the loan or to pay it off.

        In spite of a government guaranty, the lender can still request which you deliver someone to offer additional surety. while the borrower is a small business, the lender will mechanically expect the owners or principals of the business to individually assure the commercial enterprise mortgage. Doing so offers the bank and the institutional guarantor added safety in the event the company falters. In reality, when the mortgage is guaranteed via the Small business management, anybody with a possession hobby of 20% or more ought to in my opinion assure the loan. In a few cases, the lender may ask spouses of guarantors to signal also to ensure that the parties maximum affected are privy to their responsibilities and of the outcomes they could face.

        Effect of a Guaranty on a Loan

        Obtaining a guarantor can save borrower money because banks occasionally will lessen the hobby rate on assured loans if it lowers the bank’s hazard of loss. It’s no longer continually the case, though. lenders regularly ask for guarantors when the original borrower has credit issues, which may additionally mitigate in prefer of a higher hobby rate. a few monetary institutions will let you borrow greater if you have a guarantor. For mortgages, the lender might allow you to finance ninety% of the cost of the house or make a smaller down fee.

        Considerations for the Guarantor

        If you’re thinking about whether or not to guarantee a mortgage, you would possibly need to reply to those questions before you sign on the dotted line:

        •  Is Will agreeing to be a guarantor affect my credit rating?
        • If the financial institution forecloses at the borrower’s belongings, will it appear on my credit document?
        • Why is the financial institution requiring a guarantor?
        • Do I have the sources to pay the entire mortgage again, if essential?
        • If the borrower is a great friend or relative, am I organized to go through the friction that could result if the borrower can’t make bills?

        Can a Guarantor Wipe Out a Guarantee in Bankruptcy?

        In many cases, yes (however no longer all—as an instance, a assure for an educational mortgage received go away until you could show undue hassle). In fact, it’s a common reason that humans report for bankruptcy.

        As an example, assume which you took out a business loan to pursue your lifelong dream of opening a cupcake bakery. due to the fact, your commercial enterprise became new, the financial institution requested you to execute a personal guarantee. by means of signing the assure, you agreed to apply your non-public belongings to pay off the loan if the enterprise becomes unable to accomplish that. If the cupcake commercial enterprise dried up and the bakery closed, you’d probably be able to wipe out the assure in chapter 7 or Chapter 13 financial disasters.


          *Are you more than 60 days past due on your mortgage?

          *Do you own a home?

          Are you currently working?

          By clicking “Submit”, whether I do or do not purchase any products or services on this website, I hereby give my express written consent to receive calls and SMS/text messages, including calls and SMS/text messages made and sent using automated dialing equipment and/or pre-recorded or artificial voice technology and email, about offers and deals that I wish to be kept informed about from (“Partners”), at the phone number and/or email address provided on this form, including any wireless numbers provided, even if I have previously registered the provided number on any Do Not Call Registry. If I do not make a purchase on this website, it is expressly understood that the Partners retain permission to contact me as specified earlier in this paragraph. Carrier SMS/MMS and data messaging rates apply. I also agree that by clicking “Submit” that I agree to the Privacy Policy and Terms and Conditions.

        • In What Order are the Creditors Paid in a Bankruptcy Case?

          In What Order are the Creditors Paid in a Bankruptcy Case?

          While bankruptcy is a great way to get your debts discharged and get out of a bad financial situation, it simultaneously allows many creditors to get paid too. Creditors are allowed to collect some portion of the debt that is owed to them in both Chapter 7 (liquidation bankruptcy) and Chapter 13 (repayment plan) bankruptcies. The court appoints a bankruptcy trustee and they both are responsible to ensure that fair distribution of payment takes place. The payment process depends on the nature of the debt as well as the Chapter bankruptcy is filed under.

          What is The Order of Priority in a Bankruptcy Case?

          According to Los Angeles based law firm Recovery Law Group, there exists an order of priority according to which creditors are paid. The priority is always given to secured creditors followed by non-secured creditors such as credit card companies. This is so because secured creditors have collaterals attached to the debt such as mortgaged home, financed car, etc. Other debts which are prioritized include support payments (child or spousal), tax debts, employee benefits, etc. Once the secured debts are cleared, then unsecured debts are paid.

          Chapter 7

          During Chapter 7 bankruptcy, liquidation of assets takes place. The money so generated is used to clear off debts with the creditors. However, many times people filing for Chapter 7 bankruptcy may possess very few or no assets. In this case, sufficient funds to pay any or all creditors are not available. In case any asset is available, the payment is distributed in order of priority from secured to non-secured creditors.

          Chapter 13

          Even this chapter of bankruptcy gives priority to secured creditors over non-secured ones. The repayment plan made to the court-appointed bankruptcy trustee takes place over a 3-5 years’ time and gives payment to creditors in the order of priority. The remaining debt which remains at the end of the repayment plan becomes eligible for discharge.

          One should remember that any debt which remains following either Chapter 7 (liquidation) payments or Chapter 13 (3-5 years repayment plan) are discharged. However, there are certain debts such as student loan debt, taxes, etc. which are not discharged during bankruptcy and you will still be liable to pay for them in full.

          Having a proper understanding of the bankruptcy process and how creditors are paid and debts are discharged is important. Mostly people do not have any idea how the bankruptcy process takes place. It is therefore important to consult good bankruptcy lawyers so that they are aware of their rights and the options available to them before they file for bankruptcy.


            *Are you more than 60 days past due on your mortgage?

            *Do you own a home?

            Are you currently working?

            By clicking “Submit”, whether I do or do not purchase any products or services on this website, I hereby give my express written consent to receive calls and SMS/text messages, including calls and SMS/text messages made and sent using automated dialing equipment and/or pre-recorded or artificial voice technology and email, about offers and deals that I wish to be kept informed about from (“Partners”), at the phone number and/or email address provided on this form, including any wireless numbers provided, even if I have previously registered the provided number on any Do Not Call Registry. If I do not make a purchase on this website, it is expressly understood that the Partners retain permission to contact me as specified earlier in this paragraph. Carrier SMS/MMS and data messaging rates apply. I also agree that by clicking “Submit” that I agree to the Privacy Policy and Terms and Conditions.