Credit Card Debt, Bankruptcy Protection, and the Hazards of Eliminating Loans Through Chapter 7

As most people who occasionally look through a newspaper have already heard to one degree or another, petitioning credit card debt bankruptcy has become exponentially more difficult over the past five years as the federal statutes were changed to benefit the interests of the lending institutions, Chapter 7 protection is still possible for a selection of our citizens. Indeed, the men and women around the United States that still manage to convince a member of the state judiciary that they would be eligible for a Chapter 7 Credit Card Debt Relief would have to be able to show the magistrate that their household makes less than the median gross annual earnings for their state over the past year based upon income tax records: or, for the self employed, a profit and loss statement assembled and recently updated by a certified public accountant.

In addition, it would not be for the best if the people filing had much in the way of checking or savings account balances – nor, even more importantly, any records of sizable withdrawals from the bank – or investments not specifically guarded by local or national statutes. In fact, even such seeming necessities as a second car for a spouse that only works part time could be considered grist for the seizure of property, depending upon how the state circuit court judge chooses to interpret the law on exemptions. Not that possessions by themselves would necessarily alone disallow any otherwise deserving legal residents of the United States from enjoying the privileges of credit card debt bankruptcy help.

You’ll be forced to declare as part of the initial document package – the paper work sent through the county clerk and approved or denied by the judge and his or her staff – the list of most every item owned by your immediate family, but, unless you have a dozen flat screen televisions in the basement or a garage filled with refrigerators, it would be extremely unlikely to expect even the most complete list of objects to endanger your opportunity for credit card debt bankruptcy protection. You should, however, get used to the notion that a successful Chapter 7 filing could well result in your most cherished belongings being requisitioned by the officers of the court to be auctioned off to the general public with the subsequent funds split among the lenders whose debts were wiped away.

Again, this is a wholly separate issue from the question of income. You will not be able to get beyond the question of gross earnings unless you happen to pass a further Internal Revenue Service means test based upon provable expenses deemed acceptable by the most recent legislation and household costs of living as (under, in most situations) estimated by the federal tax authorities. Owning a well appointed home or keeping care of family heirlooms will typically mean nothing more to folks attempting credit card debt bankruptcy than that you are going to see them wrenched from the family’s grasp by the government and watch as they are handed over to strangers for a mere fraction of their true value. Regardless of how anxious you may be to rid yourself of all your outstanding unsecured burdens, there is such a thing as a fate worse than debt.

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