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chapter 7 bankruptcy
personal possessions
means test
mortgage payments
wild card
Chapter 7 Bankruptcy Laws - Are You Properly Informed?
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The rules that pertain to chapter 7 bankruptcy laws have to do with the laws that are applicable to the state where you reside. In other words, I mean that the specific exemptions and rules governing chapter 7 bankruptcy laws vary by state. But the fact remains that, federal bankruptcy laws govern the basic process and effects of bankruptcy. In addition to this, the truth is that federal bankruptcy sets up the guidelines from which the states spell out their own regulations.

If you must qualify for chapter 7 bankruptcy laws, you need to pass the means test. Now, what that means is that your income must fall below the median income for the state where you reside. You may wonder how this is calculated. Well, it's pretty simple! It is calculated from your income by using your earnings for a period of 6 months before you file for chapter 7 bankruptcy laws, minus deductions from certain expenses. These deductions from certain expenses include child support, alimony and mortgage payments.

It may not be difficult to file for chapter 7 bankruptcy laws. But do not forget to go for credit counseling first. Usually, there are counselling agencies that have been licensed by your state to give you counseling on your credit.

It is equally vital that you know some exemptions that have to do with chapter 7 bankruptcy laws. One of such exemptions is property law. In most cases, states allow a definite amount of exemptions on your car, place of residence and even personal possessions such as clothing, food and furniture. You can as well have some payments exempted. States will, in most cases, allow people filing chapter 7 bankruptcy laws to retain pension, Social Security, child support, alimony and disability payments as well. For the most or a percentage of what you earn as wages but which have not been paid to you, you can be allowed to keep that.

In addition to the above types of exemptions, we have what is referred to as "Wild Card Exemption" when filing for chapter 7 bankruptcy laws. The term is used under the federal law to cover a set of bankruptcy exemptions. You can use the wild card exemption for non-exempt property or property that is partially exempted. I mean, some types of property may be exempt, but only up to a particular amount of dollars.

So, in such a situation, a wild card exemption may make up the difference and let you keep the property. On the other hand if the wild card exemption is used for a non-exempt property, the property item is usually treated as if it were exempt up to the dollar amount of the wild card that is used. In any case, you should expect that the amount of the wild card exemption is kept up to date with inflation. But, it is still worth it because with a wild card exemption, you can keep any non-exempt property that is very dear to your heart. Even cash is also inclusive!

Finally, before you file for chapter 7 bankruptcy laws, make sure the state has a set of bankruptcy exemptions that you consider friendly. This is necessary because, not all states use the federal exemptions for filing chapter 7 bankruptcy laws. So that you know exactly what to expect from the chapter 7 bankruptcy laws of your state!


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