The bankruptcy laws are meant to protect both creditors and filers alike. To find out more about how the court deals with some key concerns about a chapter 7 filing, read on.

Who Is in Charge?

It's a bit surprising when filers realize that their financial situation is no longer their concern once they file. From the date of the filing until the final discharge, the bankruptcy trustee, who oversees the case, has more power over things than you do when it comes to your personal finances. That means you must check with your bankruptcy lawyer first to be on the safe side when you make a financial move.

Powerful Creditor Decisions

The bankruptcy code is used to determine who gets paid after you file. Many consumers have very little property that can be used to pay creditors because of exemptions. If there is any property that is taken from a filer, any proceeds are paid first to cover administrative costs and the trustee's pay. Next in line for payment is the IRS for any taxes owed by the filer.

Some Debts Are Discharged

Many consumers owe a lot of money on their credit cards. Thankfully, credit card debt is almost always discharged through chapter 7 bankruptcy. Other types of debt that are usually discharged include medical debt, personal loans, and payday loans. Those all fall under the umbrella of unsecured debt, which means there is no property attached to it. Some examples of secured debts include mortgages and auto loans. The home and vehicle could be in danger if the filer doesn't get the debt caught up during the bankruptcy.

Some Debts Are Not Discharged

Older tax debts can be discharged in most cases, but money owed for newer tax years may not be. Other things that are not usually included in the discharge are student loans, legal fees, money owed after a lawsuit, child support, and spousal support.

Your Income Matters

Bankruptcy codes make it more difficult for those with high incomes to file for chapter 7. Each state has a median income level. If you make more than the median, you must undergo the means test. This test allows filers to use certain expenses to file even if they exceed the state median. If you expect your income to fall, you might need to wait a bit longer to file. Also, consider filing chapter 13. That chapter has no income restrictions.

Speak to a bankruptcy lawyer to find out more about any of the above and more.