Chapter 7 Debt Liquidation

Passing The Means Test

If you are interested in pursuing debt relief by filing for Chapter 7 bankruptcy, you are not alone! Millions of Americans have chosen to seek a fresh start with the help of a bankruptcy filing. Before you can begin the process of ending your debt, however, you must first undergo what is referred to as a "means test."

In order to fulfill this obligation, you first must determine if your average annual income is above or below the median level for a household of your size in your area. The median is simply defined as the halfway point in a sample size; thus, if your annual income is in the lower half of the population's, congratulations! You are automatically qualified to seek Chapter 7 debt relief.

Should your income not fall in the lower half, you may still qualify. You must then perform a complex calculation to determine your precise amount of disposable income; if this falls under a certain threshold, which varies from region to region, you will be allowed to file under Chapter 7.

Chapter 7 Pros and Cons

The simplest way of understanding Chapter 7 bankruptcy is to think of it as selling off your non-essential possessions to pay off your debts. The court will conduct a review of your assets, determining what property if any is eligible for seizure and liquidation. Many of our clients find that they are able to retain most of their important possessions. Many items are exempt from this process, usually including your home, vehicle, furniture, clothing, and any tools you require for your employment.

Any non-exempt assets you own will be taken into custody by the courts, where they will be "liquidated" or sold-off to generate a quick amount of cash. This money will be given to your creditors, and any outstanding debts you have remaining are wiped away! Chapter 7 is generally useful for those with a large amount of unsecured debt, those without a significant amount of assets they wish to protect, or for those without a reliable source of income. If these qualities do apply to you, however, you may wish to pursue Chapter 13 debt reorganization instead.

Seek A Bankruptcy Firm You Can Trust

If you have been struggling financially under the weight of your debt, there is hope on the horizon! With the help of the skilled legal professionals at Price Law Group, you can turn your life around and finally be free of debt. Representing bankruptcy lawyers in Sacramento and throughout the west coast, our firm can help guide you to a new lease on life no matter how dire your situation may seem. We urge you to visit our website at http://www.bankruptcylawyersacramentoca.com to learn more about the optins available to you.