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Facts about Filing Chapter 7 Bankruptcy in Memphis
In the Memphis area, Chapter 7 Bankruptcy comprises approximately one-third of all bankruptcy filings. It is the best avenue for those who want a fresh start though. With a Chapter 7 bankruptcy, all unsecured debts are forgiven. In addition, individuals are allowed to keep assets such as a home and automobile as long as those payments are current.
In recent years, Congress has passed laws that stipulate that an individual must pass the “Means Test” in order to qualify for a Chapter 7 bankruptcy. With the “Means Test”, your income and available resources are compared to your expenses. Of course, the size of your family, as well as the median income for your state is also considered. Only if your income and resources are less that the state median income will you be allowed to file Chapter 7 bankruptcy.
In cases where the income level is at or above the state median income, an individual is required to document all expenses. Once this is done, your adjusted gross income per your most recent tax return is compared to the documented expense report. If an individual or couple has a certain amount of spare income left, then by law they are not allowed to file the Chapter 7 bankruptcy in Memphis. In this case, the individual would still be eligible for a Chapter 13 bankruptcy however.
The good news is that once the paperwork is out of the way and you are found to be eligible for a Chapter 7 bankruptcy, the process goes quickly. Often, within weeks an individual may receive their “Notice of Discharge of all Debts”. At this point, you are allowed to sanction in perpetuity any and all creditors who violate the bankruptcy court’s ruling.
After you receive your discharge, it’s a good idea to begin rebuilding your credit.