Bankruptcy - Chapter 7 Bankruptcy

Chapter 7 Bankruptcy is often called “straight bankruptcy.” Unlike Chapter 13 Bankruptcy it allows you to discharge most debts.

Ever since the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 became effective, you are eligible for Chapter 7 if your earnings are less than the median income in your state. If you earn more, you have to pass a “means test” which determines your eligibility. If you already had a Chapter 7 Bankruptcy within the last eight years, you are not eligible.

Should you earn more than the median income, the means test (calculated by the IRS) determines if your income is less than $100 per month after deductions for food, rent, etc. If it is, you can file. If it’s higher (up to $166/month) the court will decide how much of your disposable income could be used to pay off your debt over a five-year period. If your income is still higher, you must file Chapter 13. Check with a bankruptcy lawyer about your eligibility.

Within 180 days of filing you must also contact your local bankruptcy court clerk for a referral to a credit counseling agency in your area so that you can undergo credit counseling before you file. Counseling can be done over the Internet or the telephone. Check your options.

When you are ready to file, you must include a Statement of Financial Affairs together with detailed schedules that lists all your debts and assets, your income, and your financial history. Your assets must include all your real property, including that which is held with others; all personal property including retirement funds; and also property that you claim to be exempt from creditors. All this information should be complete and correct to avoid ending up with debts that are not discharged. Your liabilities should include debts such as taxes; all your credit cards; and secured debt such as automobiles and mortgages.

Some debts are not discharged through bankruptcy. Taxes, alimony and child support, student loans, and anything resulting from fraud cannot be included. Homesteading, under the new law, will depend on how long ago you bought your house and also on the laws of the state you’re residing in.

Most consumers already know that bankruptcy will stay on their credit record for ten years, and for those who want an alternative to bankruptcy, it’s better to act now and call Fast Track. Fast Track’s Debt Settlement Program is especially suited to consumers who would rather settle their debts. We negotiate with your creditors and encourage them to accept a one-time, discounted settlement payment. The Fast Track program provides ethical and dedicated service to help you achieve your goals.

When we start your plan we establish an affordable monthly payment which is deposited in a settlement account in your name. Once you have the required funds in your settlement account, we will contact your creditors and make settlement offers. We will continue to work with them until all debts in the plan have been settled. Fast Track’s goal is to settle all debts in the plan for 40%-60% of what you owe.