If you\’re ever deep indebted and now have exhausted all other possible options then filing for bankruptcy might well be your only choice for financial salvation. Whether or not filing for bankruptcy is the best choice for you varies according to several factors. These include your age, the volume of your dependents, how large your debt, what money you have saved for retirement, and the sum of the non-dischargeable debt. These factors will all play into how your bankruptcy case will likely to be handled.

When most people will appear filing for bankruptcy they often mean they\’re filing under Chapter 7 bankruptcy. Chapter 7 bankruptcies is what is known as a liquidation bankruptcy where a trustee is chosen to make, collect, then sell a person’s nonexempt assets. After this is done the trustee will distribute what is earned from the liquidation between debtor’s creditors. This is accomplished in an attempt to eliminate all the debt as it can be. These nonexempt assets include musical instruments, private collections (art, stamps, coins, etc.), family heirlooms, cash, savings accounts, bonds, certificates of deposits, secondary nonessential vehicles and homes, and various other nonessential items for life. Although certain items, like as musical instruments, could be filed under exempt assets when vital to a person’s financials for example a professional musician.As mentioned above there are certain things that are exempt from chapter 7 bankruptcy. These items are determined to be necessary for living. These items include tools of a trade or profession which can be essential, certain household appliances, clothes up to certain value, jewelry up to certain value, public benefits, welfare, social security, unemployment compensation, money from injury settlements, pensions, and vehicles up to a certain value.

Whatever debt is not repaid is mostly discharged. There are certain debts that can not be discharged though. These non-dischargeable debts include federal, state, and local taxes, child support and alimony, government imposed fines and penalties, most student loans, and debts not discharged from previous bankruptcy filings. Although in some instances student loans may perhaps be discharged but provided that it is determined if paying them back may cause undue hardships on the debtor in addition to their dependants. In addition to these non-dischargeable debts there are a selection of others that pertain to certain legal and illegal activities. These include debt from fraud, malicious acts, embezzlement, larceny, and debts from divorce settlements decreed by a court.

Before all this takes place though there\’s a need for a “means test.” This test was added to bankruptcy code to ensure that people declaring bankruptcy under Chapter 7 bankruptcy are in fact worthy of filing. This involves an intense study of a debtor’s income over the span of six months time. This is then compared to the income on a yearly basis. After this is successfully done the debtors salary is compared to other median household incomes of similar social standings. This test is designed to evaluate if one is qualified for Chapter 7 bankruptcy or if they fit into another chapter like Chapter 13.

The author of this article is an expert in bankruptcy laws. You can find more information about bankruptcy information on their website.

The author of this article is an expert in [http://www.bankruptcylaw.org] bankruptcy laws. You can find more information about [http://www.bankruptcylaw.org] bankruptcy information on their website.

Author Bio: The author of this article is an expert in bankruptcy laws. You can find more information about bankruptcy information on their website.

Category: Legal
Keywords: bankruptcy information, bankruptcy laws, bankruptcy