Bankruptcy and Good Faith

Bankruptcy and Good Faith

In order to meet the requirements for a Chapter 7 discharge, a debtor needs to show that they’ve made a “good faith effort” to repay this debt. This can be worrying for some debtors who may assume they have to repay a substantial portion of their debt before they can even consider filing. To satisfy this obligation, the debtor need only show that they were honest when they took out the loan and truly tried to pay it back. A bankruptcy attorney can examine your situation and explain how this requirement might affect you.

There isn’t a single amount or set-in-stone number of payments a person must make. The court will examine each case individually to see if the debtor has made a good faith effort to repay their loans. In general, however, the court wants to see at least three payments made to a creditor to show good faith. This is just a general rule and may not apply to your particular situation. A bankruptcy lawyer will need to review your payments in order to explain how this requirement might impact you.

The court looks for these payments in order to prevent bankruptcy abuse. If people know they are about to file bankruptcy, they may max out all of their credit cards in anticipation of discharging this debt. Since this abuse costs both creditors and other debtors money, the court carefully looks for abuse and will dismiss a bankruptcy if it finds it.

At Westbrook Law Group, we can carefully examine your situation to ensure you have met this requirement. We know that filing bankruptcy can be a confusing, difficult process and we will do everything we can to guide you through it. We have helped clients in St. Charles, Troy, and throughout Missouri get the help they need from overwhelming debt. For a free consultation to discuss your situation, contact Westbrook Law Group today.

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