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FILING CHAPTER 7 BANKRUPTCY IN WEST VIRGINIA
The right to file for bankruptcy is provided by federal law, and cases are handled in federal court.
Individuals primarily file Chapter 7 bankruptcy, but corporations and LLCs can also file. Although corporations and LLCs cannot receive a discharge of their debts, Chapter 7 can still offer some advantages to a struggling corporation or LLC.
The Chapter 7 filing process takes about four to six months.
The cost of the filing fee paid to the bankruptcy court is $335.
Credit counseling with an approved agency is required both before and after filing.
ADVANTAGES OF CHAPTER 7 BANKRUPTCY
Chapter 7 is known as the “liquidation bankruptcy’’ because it discharges most of your unsecured debt. As a result, filing for bankruptcy can contribute to the person’s immediate relief from collection activity.
A Chapter 7 filing is the quickest, simplest, and most common type of bankruptcy. About 66% of bankruptcy cases filed in the U.S. are Chapter 7.
Chapter 7 bankruptcy provides the following:
- No payments to creditors.
- Eliminates overwhelming debts such as credit card debt, personal loans, and medical bills.
- Creditors must cease any type of action against debtors.
- Foreclosures are canceled.
- Individuals can keep their houses, cars, and other personal belongings.
- Credit can be rebuilt in less time than with any other bankruptcy chapter.
DO I QUALIFY FOR CHAPTER 7 BANKRUPTCY?
If you have decided to file for a Chapter 7 bankruptcy, it is essential to remember there are requirements that you, as the debtor, must meet to be eligible to file. To determine eligibility, you will need to pass what is referred to as a “means test,” to see where your income falls in comparison to the median income level in the state in which you are filing the bankruptcy.
CHAPTER 7 MEANS TESTS
To successfully pass the means test, you must have very little to no disposable income. The means test will take your average monthly income that was accumulated over the past six months before you filed for bankruptcy, then compare it against the median income of a similar household in the State of West Virginia. Should your income fall below the median, you will automatically qualify to file for Chapter 7 bankruptcy. Many people who are having severe financial strains and debt difficulties find they pass the means test with virtually no issue since they are likely to be making very little money to begin with.
What if my income is above the median?
If the test finds that your income is above West Virginia’s median, you are not necessarily disqualified from filing a Chapter 7 bankruptcy. There are options for debtors who do not pass the means test. Since the means test is a balance stage where your expenses are weighed against your income, you can complete the entirety of the means test instead of trying to qualify for Chapter 7 bankruptcy based solely on your income. If, after you deduct all allowable expenses from your income leaves you with no disposable income, you will be able to file for Chapter 7 bankruptcy.
HOW DOES CHAPTER 7 WORK?
The first step to file for Chapter 7 is to file a petition with the bankruptcy court in Wheeling if you reside in Hancock, Brooke, Ohio, Marshall, Wetzel, or Tyler counties. The bankruptcy court will typically place an automatic stay in effect which, protects you from all types of collections. This stay prevents phone calls, garnishments, foreclosure, and lawsuits.
WHAT HAPPENS AFTER FILING CHAPTER 7?
In filing Chapter 7 bankruptcy, you can eliminate most, if not all, of your unsecured debt. If your petition for Chapter 7 is approved, you will be released from the obligation to make payments. You can keep any property that falls within an exception. While most property falls within an exemption, if your property does not, then a bankruptcy trustee may sell the property and use the proceeds to pay your creditors.
HOW DO EXEMPTIONS WORK?
One of the biggest questions in a Chapter 7 filing is whether you would be able to keep your property, such as your house, car, and retirement account. The answer depends on which property exemptions you can use on your bankruptcy forms. They are called exemptions because they exempt or excuse specific property from being seized or taken. In most cases, exemptions protect most day-to-day items that you own.
Some exemptions protect entire categories of property like retirements accounts, regardless of value, while other exemptions only protect specific property like a vehicle up to a certain value. Typically when filing for Chapter 7 bankruptcy in West Virginia, you can keep not only your exempt property but also property obtained after bankruptcy is filed. There are some exceptions, such as a non-exempt inheritance received within 180 days after your bankruptcy. Also, bills that arise after bankruptcy is filed have to be paid.
There are some debts that bankruptcy cannot eliminate such as some taxes, past-due child support or alimony, student loans unless there is an undue hardship, debts not listed in the petition, unpaid liens, and debts resulting from fraud.
Questions? Need Help? Call Guida Law Offices at 304-748-1213 or toll-free 800-870-0700 (WV only) to speak with a bankruptcy attorney about filing for bankruptcy. We can help you navigate through the Chapter 7 filing process and find a fresh financial start.
Member, National Association of Consumer Bankruptcy Attorneys