What Are Some Common Mistakes to Avoid When Filing for Chapter 7 Bankruptcy?
Choosing to file for Chapter 7 liquidation is a major life decision you should only make after consulting with an experienced bankruptcy attorney. Look for a law firm in South Carolina, such as Reed Law Firm, that focuses its practice exclusively on local bankruptcy law.
Our dedicated Columbia Chapter 7 bankruptcy lawyers might help you avoid the most common debtor mistakes, protecting your right to file for alternative proceedings and achieve financial freedom. Consider the following top three mistakes petitioners make when filing for Chapter 7 bankruptcy and connect with our office online or at (803) 726-4888 to achieve the best outcome in your case.
1. Ineligibility Under the ‘Means Test’
Your right to obtain debt relief through Chapter 7 bankruptcy proceedings is not absolute. Only petitioners who pass the ‘means test’ qualify for potential discharge under Chapter 7. The ‘means test’ uses your income, family size, secured expenses (mortgage and vehicle), and debts to determine your disposable income level.
If your income falls below the South Carolina state median, you generally qualify for Chapter 7. Income above the state median level requires a more detailed calculation, which might result in dismissal and recommendation that you file for Chapter 13 wage earner’s bankruptcy. Because filing the initial petition impacts your credit and prevents you from filing another petition for at least 180 days, it’s important to work with legal counsel to perform this test before you file for Chapter 7 bankruptcy.
2. Failing to Consider Alternatives
Sometimes, filing for Chapter 7 bankruptcy is the mistake to avoid. Other viable options exist to help you manage, negotiate, and even partially discharge your debts. These may include the following:
- Private debt consolidation
- Chapter 13 wage earner’s payment plan
- Restructuring debts under Chapter 11
- Retaining debt settlement counsel
- Personal liquidation and settlement with third-party legal help
- Charities and debt relief organizations
You could save your home, vehicle, and assets, all while taking advantage of bankruptcy court protections without the need for Chapter 7 liquidation. Compassionate bankruptcy attorneys will diligently consider your unique financial situation to help you build a better future and achieve true financial freedom.
3. Not Hiring Legal Counsel (Filing Pro Se)
If you cannot afford to pay your bills, it’s understandable that you cannot afford to pay a bankruptcy lawyer outright. Though bankruptcy judges and their dedicated staff will do their best to assist pro se claimants, it can be difficult to achieve the best results in your case without the help of a dedicated bankruptcy lawyer. Creditors will hire experienced attorneys to represent their interests, and it’s difficult to maximize your non-exempt assets and even achieve discharge without legal help.
You can still get quality legal representation from Reed Law Firm without unmanageable attorneys’ fees and costs. We might also help you file for a Chapter 7 filing fee waiver in certain cases. Do not be afraid to schedule a confidential consultation with our dedicated Columbia debt relief team today by calling (803) 726-4888 or connecting with our legal professionals online.
