When you get ready to consider Chapter 7 bankruptcy as a way to relieve your debt issues, you will need to consider whether you just received or will be receiving a windfall of cash some time soon. A windfall of cash can affect your bankruptcy case, so here are several important things to know about this.
Filing for Chapter 7 is based on your current income
When you complete the test to determine if you qualify to file for Chapter 7, you will have to include all the income you received during the last 180 days, which is about six months of income. This will include adding in your income from your job, child support, any inheritance money, and any other cash you received during this time frame. If your total amount is less than the state median amount, you will qualify. If your income is greater than this amount, you will not be able to use this branch of bankruptcy.
The trustee will examine your finances for the next 180 days
In addition to adding up your income for the last 180 days, the trustee also has the right to view your income during the next 180 days after you file for bankruptcy. The goal of this is to find out if you receive any large windfall of cash. This can include a tax refund check, money from lottery winnings, or money from an inheritance. If you receive money in any way, you might not be able to keep it. Because of this, it is better to time your bankruptcy case so that you do not encounter any windfall of cash during the time before or after you file where the trustee can use this information against you.
The trustee can seize assets to pay off your debts
The tradeoff you make when you choose Chapter 7 is that you take the risk that the trustee will take things you own in exchange for offering a discharge for your qualifying debts. If you receive a windfall, the trustee could take it from you and use it to pay off debts that were forgiven in your case.
Before you can file for Chapter 7, you will need to meet with a lawyer who will perform a means test. Additionally, the lawyer will review a lot of different factors about your income and financial situation before he or she recommends Chapter 7 bankruptcy. To learn more, contact a bankruptcy lawyer service today.