|
Home > For Everyone > Debt and Bankruptcy > Consumer Bankruptcy > Chapter 7 Consumer Bankruptcy |
| |
|
|
Chapter 7 Consumer Bankruptcy
|
|
|
Last Updated August 5, 2008 |
|
Prior to filing a bankruptcy petition, a debtor must complete a "means test" calculation to determine eligibility for Chapter 7 bankruptcy. This test is based upon figures from the U.S. Census Bureau and the Internal Revenue Service regarding the median income and expenses for individuals in a particular state. A debtor must provide proof of this calculation in a bankruptcy petition. The purpose of a means test is to limit Chapter 7 bankruptcy to only those debtors who truly cannot repay their debts. If a debtor has is able to repay his debts, the court will require the debtor to file a Chapter 13 bankruptcy. The new means test, established by Congress in 2005, will result in more people repaying their debts under Chapter 13 rather than wiping out their debts under Chapter 7. While a wider range of debts can be discharged under Chapter 13 than in Chapter 7, debtors are forced to attempt repayment for five years. Debtors who fail to meet the requirements of the means test risk having their Chapter 7 petition dismissed for abuse and having the petition converted into a Chapter 13 bankruptcy. |
|
Read more...
|
|
|
Last Updated August 5, 2008 |
|
A Chapter 7 bankruptcy is a federal court-ordered and supervised procedure in which a trustee liquidates a debtor's assets and distributes the proceeds to the debtor's creditors. The court discharges all of the debtor's dischargeable debts in approximately four months, meaning that the debtor is no longer responsible for paying these debts. An individual may only file for a Chapter 7 bankruptcy once every eight years. This form of bankruptcy is called liquidation. Bankruptcy estates that do not have any assets to liquidate are called "no-asset cases." |
|
Read more...
|
|
|
|
|
|
|
|
David M. McCormick |
|
Newport News Family Law and Bankruptcy Attorney |
One Oyster Point 827 Diligence Drive, Suite 200
Newport News, Virginia 23606 |
|
Practice Areas: Family Law, Debt and Bankruptcy, Divorce, Adoption, Traffic Law Violations
|
|
www.dmmlegal.com/
|
|
Law Offices of Tom C. Smith |
|
Virgina Beach, VA Bankruptcy and Divorce Law |
1600 Virginia Beach Blvd
Virginia Beach, Virginia 23454 |
|
Practice Areas: Debt and Bankruptcy, Divorce
|
|
www.tomcsmith.com/
|
|
|
|
