Many people in this country are finding themselves forced into learning how to declare bankruptcy in order to get certain types of financial relief. In some cases, they are forced to file for a Chapter 7 bankruptcy. A Chapter 7 bankruptcy is also sometimes called a liquidation bankruptcy. In order to qualify however, you must meet certain financial criteria. This criteria will include being under the median income for your current family size, and also not being eligible to pay at least 100.00 dollars a month, or 6,000.00 dollars over the next five years time. A judge will look at all of your finances, income, and expenses, and then determine if you are eligible.

When applying you will need to include the complete list of every single debt that you have. This will be all of your creditors, all of the amounts past due, and any open or revolving accounts. As soon as you have filed for bankruptcy, all of your creditors will have to stop contacting you, until a verdict is reached. If you are granted the bankruptcy, all assets are liquidated in most cases. They are then used to pay off the debts. These assets could be your home, vehicles, life insurance, social security, or almost anything that is in your possession and has value. If you are granted a bankruptcy, all leftover debts that qualify, will be discharged.

Not all debts are discharged, so if you owe the government money, or if a creditor demands payment, that will still be owed. You also may be able to put on some sort of payment plan for that. If you qualify financially, you also may be able to do a reaffirmation of debts, which means you can keep some of your debts, such as a car payment. The judge will determine if you are able to pay that or not. You are also not allowed to move to different states to try to take advantage of different states bankruptcy benefits, and this will be monitored. Always contact a lawyer before filing for bankruptcy, and make sure that you explore all of your options.