Now may be a good time to file bankruptcy if you have been delaying the decision. If the economy turns around, like the news reports, and your income increases or you obtain a job, you may not qualify for a chapter 7 bankruptcy. A Chapter 7 is known as the fresh start. You may still be able to keep your house and cars but you may also be able to walk away from them if you do not want them.
To qualify, you must not have filed a chapter 7 bankruptcy in the last 8 years. Certain debts may not be dischargeable such as, taxes owed, alimony and child support, if you paid taxes with your credit cards or if you have done cash advances. See our website for more specific details.
The sooner you contact an attorney to discuss your financial situation the better off you will be.
Some situations may not allow you to file a chapter 7. For instance I have a client who owned a second home free and clear- no mortgage. In a bankruptcy, the court looks at that as cash in your hand. So if the property is worth $90,000.00. you would have to either give the trustee the property to sell or pay the trustee close to the $90,000. The client did not want to lose the second home. My client wanted to get rid of a second mortgage on their first home. I was able to negotiate a low pay off to get rid of the second mortgage and some other loans my client had through the same bank without filing a bankruptcy. They will get 1099 on the relief of debt for next year’s tax return.