Posted on: 25 November 2015Share
It can be quite easy to get into financial trouble - especially in today's tough economy. The good news is you can help reduce your financial burden by filing for chapter 7 bankruptcy. However, this is not a decision that should be taken lightly. Here are three things you need to know about filing for chapter 7 bankruptcy.
1. You must complete credit counseling before you can file.
One important thing to know about filing for chapter 7 bankruptcy is that you must complete credit counseling beforehand. As a matter of fact, you must fulfill the counseling requirement within the six months before filing.
You will need to make sure that you complete the credit counseling requirement with an agency that has been approved by the U.S. Trustee's office. If you fail to go through an approved credit counseling agency, you will have to go through the counseling session again.
After you complete the counseling, you will get a certificate that must be filed within 15 days after you file for chapter 7 bankruptcy.
2. You may still have some debts after your bankruptcy is completed.
A common misconception is that all of your debts can be wiped out during chapter 7 bankruptcy. That will depend on the types of debt you have. Some of the debts that chapter 7 bankruptcy won't discharge include:
- Student loans (unless undue hardship can be proven)
- Child support
- Recent tax debt
- Court fees
- Government fines
- Personal injury or wrongful death damages
- Debts incurred through fraud
There may be other debts that won't be discharged in your chapter 7 bankruptcy, but you will need to consult a bankruptcy attorney about your particular list of debts.
3. There is a limit to how often you can file for bankruptcy.
While there are no restrictions on how many times you can file for bankruptcy, there is a certain time limit that you have to wait between the different filings. For example, if you file for chapter 7 bankruptcy, you have to wait eight years before you can file for chapter 7 bankruptcy again. However, you only have to wait four years if you want to file for chapter 13 bankruptcy after getting a chapter 7 discharge.
If you previously filed for chapter 13 bankruptcy and you want to file for chapter 7 next, you have to wait six years before you can do that. Having these time restrictions for filing bankruptcy multiple times prevents individuals from abusing the bankruptcy system.
As you can see, there are a lot of things to consider before you go through with filing for chapter 7 bankruptcy. The best thing to do is go through the credit counseling and consult a good bankruptcy attorney to help you determine if chapter 7 bankruptcy is the best option for your needs.