What You Need To Do To Erase Debt Using Chapter 7 Bankruptcy

If you are in a really serious debt problem, sometimes declaring Chapter 7 bankruptcy is the best way to erase debt. Basically this is the only way to erase debt without actually paying the debt off. Nowadays, the new bankruptcy laws have been placed to restrict the filing for bankruptcy, but there are some ways where you can deal with them so you can declare bankruptcy and erase debt.

Take some essential courses

According to the new law, every person who files for Chapter 7 bankruptcy has to complete a credit counseling course within six months of filing. The U.S. Trustee program has a list of qualified credit counselors who have an authorization to provide you the course, give certification of compliance, and let you continue your life normally. These courses are also available online so it will be very convenient for you to finish the course.

Another course that you should know about is the Financial Management Course. You have to complete this one if you want to declare bankruptcy and erase your debts. The same likes the previous course, U.S. Trustee program also has a list of approved courses that you can take. It is also available online for your convenience.

Pass a means test

The new law also compels debtors to pass a means test before you can erase debt through bankruptcy. The test is based on the actual income of the individual or family who declares bankruptcy. It is adjustable based on the family size up to four persons. Furthermore, the government also knows that each part of the country has different economic situations and thus there are different means tests for every state.

For example, the means test states that for a single individual, the lowest median income is $30,424, which is in the state of Mississippi, while the highest median income is in Washington at $48,030. It is still possible to declare for Chapter 7 bankruptcy if your income is only slightly higher than the median income in a state where you live. You should consult with a lawyer for further details on this issue.

Chapter 7 bankruptcy

Many debtors consider this as a fresh start in their lives. They should turn over all non-exempt property to the bankruptcy trustee. People who are filing for this chapter usually do not have any significant assets so no property is turned over. After four to six months the debts are discharged. If you are in a really serious debt problem and you have tried all available options to pay your debts with no avail, then you can erase debts using this Chapter 7 bankruptcy.

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