People with a lower income may find it hard to pay back debts. Change of job, divorce or illness can change financial circumstances for the worse. If this happens, there is chapter 7 bankruptcy law.
It can be easy to rack up debts and find it difficult to meet payment demands and if there are several creditors, even managing a payment plan can be challenging. Pay cuts at work, change to a lower salary or loss of a spousal income after the breakdown of a relationship are some of the reasons why people are unable to pay back what they owe, even when they took out credit agreements with the intention of paying them.
Help for People on Lower Incomes
Chapter 7 bankruptcy law allows some eligible people to discharge their debts so they no longer have to pay them back. Individuals who earn less than the average income in the state of Colorado will usually be eligible to have their debts written off.
To apply, claimants will have to provide full evidence of their income and expenditure.
What Debts Can Be Written Off?
Credit cards, loans, rentals, business debt, taxes over three years old, medical bills and vehicle loans on cars that have been repossessed are all eligible to be written off, as well as certain claims and judgments.
However, individuals cannot claim for chapter 7 if they have to pay a criminal fine or restitution to a victim of a crime they committed, alimony or child support payments (which are familial responsibilities) or student loans provided by the government.
It’s important to remember to list all your eligible creditors on your application as any that are omitted in error will not be included in the claim and will still have to be paid.
For specialist advice on chapter 7 bankruptcy from a bankruptcy lawyer like Allstate Law Center, call for an initial appointment and take the first step to getting out of debt.