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Getting ready for your Chapter 7 bankruptcy
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Getting ready for your Chapter 7 bankruptcy

On Behalf of | Jan 24, 2023 | Bankruptcy, Blog, Chapter 7 |

If you are struggling to stay current on credit card, auto loan or other debts, you may want to consider filing for Chapter 7 bankruptcy. To qualify, you will likely need to pass a means test verifying that you have little or no disposable income. There may also be additional steps that you’ll need to take prior to filing a bankruptcy petition in Louisiana federal court.

Stop amassing debt

You should stop using credit cards or other lines of credit the moment that you plan on filing for bankruptcy. If you accrue additional debt just before you file, creditors may claim that you’re not doing so in good faith. This may result in your Chapter 7 bankruptcy case being dismissed or losing access to the automatic stay. An automatic stay prevents creditors from seizing assets, filing lawsuits or taking other steps to take action on an outstanding debt balance.

Gather information about your assets

During the filing process, you will be required to declare any assets that you might have. Items such as cash in a bank account, an expensive watch of equity in your home would qualify as property held within your bankruptcy estate, although both the state and federal government provide for some assets to be exempt. Lying or making other efforts to obscure the extent of what you own could complicate your ability to obtain a discharge in your case.

Filing for Chapter 7 bankruptcy may allow you to eliminate some or all of your debts in a matter of weeks. After debts have been discharged, you are no longer obligated to make payments or respond to creditor letters or phone calls about those balances. If creditors do contact you about a debt that was discharged in bankruptcy, you may have grounds to take legal action against them.

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