Chapter 7 Bankruptcy Lawyer In Florence, SC
Life never goes quite as we plan. Most families don’t set out to accumulate debts they can’t pay, but with interest rates increasing and the job market slowing, it’s not uncommon for these debts to become unmanageable. One car accident, company restructuring, or medical event can change everything – but there is hope for relief.
Discuss the benefits and drawbacks of filing for traditional bankruptcy in South Carolina with the Florence Chapter 7 bankruptcy lawyers at Reed Law Firm, P.A. Schedule your confidential debt relief consultation today by calling (803) 726-4888 or connecting with their legal team online.
Understanding Chapter 7 Bankruptcy
Chapter 7 of the United States Bankruptcy Code sets forth the rules governing the liquidation bankruptcy process. For this reason, it’s referred to as ‘Chapter 7’ or liquidation bankruptcy. This form of bankruptcy is available to individuals or businesses whose debts and expenses far exceed their income, including those who’ve lost their income stream. It allows for the complete discharge of all qualifying debts while preserving a ‘nest egg’ to help you rebuild your life.
Qualifying for Liquidation in Florence, South Carolina
Unlike other forms of bankruptcy, Chapter 7 does not involve a repayment plan. The court will perform a ‘means test’ based on South Carolina income guidelines to determine whether you qualify for this form of debt relief. This test involves comparing your monthly income, expenses, and debts to determine whether you’re able to pay at least a portion of the money owed. If not, the court may begin the liquidation and discharge process.
Dischargeable and Non-Dischargeable Chapter 7 Debts
Chapter 7 bankruptcy involves the complete liquidation (sale) of all non-exempt assets. As such, you may not be able to keep your home, vehicles, savings, stocks, or high-value collectibles. If this is important to you, our experienced Florence, S.C. bankruptcy lawyers might help you file for a different type of bankruptcy or ‘reaffirm’ the debt.
Dischargeable (Forgivable) Loans and Debts
Once the bankruptcy trustee gathers and sells your assets, he or she will pay down the following dischargeable debts:
- Mortgage deficiency
- Auto loan deficiency
- Credit cards
- Medical bills
- Utility arrears
- Personal loans
- Student loans (in cases of extreme hardship only)
- Civil judgments
- Past-due rent
Secured debts, such as your mortgage and car loans, are paid from the sale of those assets. You’re then forgiven any remaining balance. The remainder of your assets, such as stocks and non-exempt jewelry, is then sold to pay a portion of the remaining debts. The balance is then legally discharged, and the lenders cannot come after you for additional payments.
Non-Dischargeable Debts
Importantly, the following debts are not dischargeable even if you qualify for Chapter 7 bankruptcy in South Carolina:
- Alimony
- Child support and arrears
- Recent tax debts
- Most student loans
- Civil judgments involving willful or reckless conduct (drunk driving)
- Restitution
- Debts resulting from criminal conduct
Not every obligation is dischargeable, but these non-dischargeable debts might become more manageable after your qualifying debts are eliminated.
Florence, S.C. Lawyers for Chapter 7 Bankruptcy
Chapter 7 isn’t right for everyone, as it does have certain tax and housing consequences. However, it’s often the best choice for insolvent families or those without significant assets. Confidentially discuss your goals and the best debt relief strategy in your case with the compassionate Chapter 7 bankruptcy attorneys at Reed Law Firm, P.A., today by calling (803) 726-4888 or contacting us online.
