Bankruptcy is a tough reality for the people who face this issue in their lives. It is a completely legal process to declare that someone has no financial capability to repay the outstanding debts to the creditor or the person or the business institute. Under the code of bankruptcy, chapter 7 is most common as filing under this chapter is much more compared to other chapters.
Most of the people prefer to go to chapter 7 due to their reality. Filing any chapter costs the people who are bankrupt under chapter 7. However, it is important to know how to file chapter 7 with no money in case your financial condition is really bad or you want to save money. Here in this article, you can get a broad guideline on how to file chapter 7 with no money.
Content Outline
Do You Qualify For Chapter 7 Bankruptcy?
Chapter 7 is one of the most common types of bankruptcy. The rate of filing for bankruptcies is much more compared to chapter 11 and 60-70% of filing bankruptcies is about chapter 7. Chapter 7 can be known as liquidation of bankruptcy as it can discharge some of your unsecured debts. These unsecured debts can be known as credit card debt, medical bill expenses, and personal loans.
When you are going to choose this option like filing bankruptcies under chapter 7, you need to know whether you are entitled. To qualify for chapter 7 bankruptcy, you have to pass a means test. A means test is a term to examine financial status such as earnings or income, expenses, secured and unsecured debts. According to a different state, there may be any specific rules of the limit of the income to qualify chapter 7 bankruptcy. More importantly, there may be any debt rules like the current level of debts in line with better to worse.
When you don’t have enough debt for bankruptcy, you may have to sell out non-exempt properties but there is no binding to sell your exempt property like home, car, and home equipment and so on under the bankruptcy code. Chapter 7 can be a lengthy process for some people because it takes about 4-5 months to complete the chapter 7 bankruptcy process.
Benefits of Filing Chapter 7
Why you need to file chapter 7 bankruptcy is a big question. You need to know the answer first and then decided to file under this chapter. There are some benefits of filing bankruptcies under chapter 7 which are-
Prevent Illegal And Forceful Collection By The Lenders
Everyone may want to gain benefit if someone is pressurized forcefully and illegally. But there is law and legal bindings to cease the lenders or debtors not to collect anything from the debtors. When you will file bankruptcies under chapter 7, you will be on automatic stay according to the court order. This order highly explains the protection of the creditors and the prevention of illegal and forceful collection by the lenders.
Simple To Proceed With Chapter 7
Legal terms are really hard to understand. Not everyone wants to go with the complexity of the law. Even people want to get a simple solution in case they have faced any legal complexity. So chapter 7 can be one of the simple processes to make sure you are getting rid of the predicament of bankruptcy issue. However, chapter 7 is really easy to understand for the bankrupt people who can know details of debt payments in the exact way, case default system, repossession, and necessary lawsuits. The explanation of those areas are simple but they can tarnish the credit history.
Luckily, one can study also a lot to make sure they are not going to face any more debts crisis. So if your condition matches with chapter 7, this can be a better decision to go with chapter 7 indeed.
For Being Organized Financially
Filing under chapter 7 will be a big lesson in life. Before being bankrupt, one might have spent uneconomically. This condition can be one of the possible reasons for bankruptcy. But if one wants to economical, they have to be organized in the financial decision. However, filing under chapter 7 will teach you how to be organized and disciplined. There are many credit counseling which is mandatory to take in the chapter of 7. You can thoroughly know ins and outs of being more responsible to decide financially.
Additionally, you will have a clear concept of credit and the interest rate of credit. More importantly, you can have a skill on debts because you can make a decision on when your debts are to be paid without a lower rate of interest.
Saving Personal Property at Own Self
In the bankruptcy code, there is a common issue which is an exempt asset. This exemption highly will save you to keep your personal income, a property that you own. The exempt asset is not under the bankruptcy code. In spite of being bankruptcy, one can have full control over your salary you earn and property that you have purchased or you will purchase.
So these are benefits of filing bankruptcy under chapter 7, but there may be some bad sides but people need to be a little bit careful. The credit report will have a bad history for up to 10 years. More importantly one can lose all of the credit cards indeed.
The Options of File Chapter 7 Without Money
Being bankrupt is really a critical situation in life. Not every businessman wants to face this hard reality in life. But there is also a way on how to get rid of bankruptcy is worth adding satisfaction in life. However, there are some options that can save someone for filing without money.
Judgment Proof
In case you have a very little amount of property that you own an income from social security and pension, these real state and income are legally protected where nobody can claim on as per bankruptcy code. Additionally, your belongings may add up less than $2,000, you can go judgment proof. If you get judgment proof, you don’t have to file bankruptcy chapter 7. The creditors can be notified that you don’t contact me as nothing can be paid to you due to judgment proof. This may not be applicable when you see that your financial situation is improving within 10 years or fewer.
Discounted or Pro-Bono Legal Help
There is a local bar in every state of the United States of America. Legal aid society is ready to provide the bankruptcy people with the necessary information and they assist how to proceed the case. If the bankrupt people want to file this bankruptcy without money, they need to contact and talk about this openly. There is a team of local lawyers in the legal aid society and they provide service freely for the needy people. But that people may need to qualify the poverty status set by the state rules.
Waiving Chapter 7 Fees
When you don’t have any ability to pay for the filing charge of chapter 7, you may also contact the court. The court will examine your related financial documents and you have to prove that your
Income level is very limited and you have already proved the extreme poverty line according to state rules. The documents may be your income, expenses, property and other means and the court will decide to waive your fees according to your financial condition. In this way, many bankrupt people file bankruptcy of chapter 7 without any fee.
However, after being bankrupt, you may have an income source that is not so high. So you may stop any unnecessary spending which may be a reason for forcing by the creditors. Additionally, the most important advice is to minimize spending to a different source and also your next paycheck directly to a bankruptcy lawyer. When bankruptcy is filed, it is really important to convince your credits that you are in the very critical condition of money. The important spending in this state should pay for your attorneys who can proceed the case on behalf of you.
Filing For Chapter 7 Bankruptcies Without Any Attorney
Bankruptcy is really grueling issue to most of the people. The main fact of bankruptcy is to file it to the court. There is a filing cost and one has to pay the filing cost ranging from $335 and may be higher according to different states. Filing for bankruptcy costs you when you don’t have any knowledge on how to handle it. More importantly, one can file for chapter 7 bankruptcies with an attorney. There are some few steps for filing for chapter bankruptcies without an attorney.
Bankruptcy Waiver Plans
Your financial condition is really tough and you don’t have any way to pay filing costs. In the court, you may collect important information on payment on the installment basis. There is a 120 installment system for the people who have low-income people.
More importantly, you can get a fee waiver from the court on the basis of application. The important documents are required to prove that you don’t have any financial capability to pay the filing cost. Part of these documents, certificate of living under the poverty limit. The combined family’s income should be less than 150% of the poverty line.
File at Your Own For Chapter 7 Bankruptcy
Whether you are in critical condition financially or you want to save money does not matter. You may file for chapter 7 bankruptcy without an attorney. Here are some simple ways to file at your own effort.
Make Sure Your Chapter
There are a different chapter of bankruptcy under the bankruptcy code. It is important to know which chapter you are entitled to. You should research the criteria of chapter 7, 13 and more to make sure your chapter. This can be easy when you are going to face a means test. It is really helpful for you which chapter is better for you.
Getting Information on Exemption According to State
The exemption is an important issue to save your personal income and property. You are not entitled to pay the creditors by selling an exempted property. So you study and get information on the exemption in a state where you are living.
Collect Related Papers For Chapter 7 Bankruptcy
Related papers for chapter 7 bankruptcy include pay stubs, bills, and details of your property, income, expenses and many more according to the court requirement. You have to collect these papers. It is important to note that these papers should be accurate and honestly you have to fill up any forms. Any discrepancy of information explained will go against you and you may face a more complicated legal issue.
Participate The Creditors Meeting
A meeting of the creditors is a conference where there is all parties present there. The creditors, the trustees, and other parties will ask you a very hard question and they will make in trouble. They won’t believe your plan. It is important to stay honest and you have to answer their questions correctly and strongly. If needed, you may show your documents to them for fairness and credibility.
Attend The Court Appearances
Bankruptcy is a legal issue, and the court will handle it. However, the court may call for your appearances and you may appear before the court at your own. However, if you think that an attorney is required to deal with your case, you can do that. But you can continue appearance at your own if you have the extensive knowledge about the bankruptcy case dealings in the court.
Rebuild After Bankruptcies
It is a really important step to save your life from the economic disaster as you have faced in your life. Rebuilding your life from the same danger can be worth leading a happy life. So after facing bankruptcy, you may follow some step to rebuild your financial stability to minimize personal cost.
When you are so depressed in financial condition, you need to have a plan on how to minimize personal expenditure. Your income and expenditure should go on the same line. Any unplanned or unbudgeted expenditure can cause this bankruptcy again.
Be Focused on Savings Account
Whatever you earn does not matter. What matters is how much you are spending in line with your income. You need to balance between income and expenditure. More importantly, saving a little portion of income won’t keep you in trouble. But this little portion will form a large amount which can protect you from any financial disaster in the future.
Rebuild Your Credit
Surely your credit was worse in your life. So it is time to rebuild your credit now. After declaring bankruptcy, your credit will be observed for 7 years under bankruptcy chapter 13.
Under chapter 7, your credit status will be observed for than 10 years. When you will have a good credit history, you don’t have to face any trouble in getting a bank account or any other mortgage loan.
You may have a plan for how you can improve this credit history. In general, improving credit history may take several months as you have a very bad condition financially. But a little effort may make you win in this race.
Engage in Investing
In spite of having a bad situation, you should take a risk in the investing process. You need to research a lot in the market where you may invest where there is a chance of gaining profit. No matter you, how less your income after bankruptcy. It is a suggestion for you to be financially strong by taking so many steps like this.
Take Secure Debt Loans
While you have taken steps to rebuild your credit and finances, your financial condition is not fully healthy. Though some auto lenders may offer to lend buy an auto with the car loan, you need to follow some strategy to balance how you can repay this loan. Surely your car loan terms and condition taken before being bankrupt may not fit.
You may also need co-signers on the loan but that does not matter indeed. On the other hand, you may pay a higher interest rate as auto lenders generally provide loans with a higher interest rate. So you take the decision if you can go on with these terms and conditions.
In case you want to get a mortgage for the real state property, the same terms may apply. You may have to pay the higher down payment, higher interest rate, and need a cosigner and so on. But you have to wait for one or two years after being discharged of bankruptcy.
Use Debit Card Wisely
As your financial condition is not good enough, so you may be a little bit careful to use the debit card. Though many companies come with excellent perks to let you use a debit card, it will better to use a debit card for only a single expenditure like buying only food. In addition, you may also go cashing with for some months to make sure you can protect you over expenditure.
The debit card may be easy to get with perks but it does not mean that you should use it for unnecessary purposes of spending. You need to be cost efficient in every sphere of life. So you should take a while when you are planning debit card or cash expenditure.
Final Outline
Saving money in this stage is worth saving your life. It is simple to know how to file chapter 7 with no money or you don’t have to hire an attorney for filing bankruptcy under chapter 7. So you can research broadly to know every detail about this chapter if you are entitled. Knowledge from research can save your filing fees, which are really a little bit high after being bankrupt.