Highlights of Chapter 7 Bankruptcy

By the time you finish reading this, you will know the important point of Chapter 7 bankruptcy. If you are thinking that everyone can file for this type of bankruptcy, you are wrong. Only certain people can file for Chapter 7 bankruptcy. Well, if you are wondering who, you should read on.

Eligibility For Chapter 7 Bankruptcy

Chapter 7 bankruptcy is available to individuals and some businesses. In order to file Chapter 7 assets should be limited to those that can be claimed as exempt.

In some cases, though, Chapter 7 may be best even if someone has more assets. The court, though, may rule that a person can not file a Chapter 7 if their assets are high enough to clear their debt.

Chapter 7 Bankruptcy Process

The process of filing a Chapter 7 bankruptcy starts with collecting all the information about your debts and your financial situation. You will be required to meet with a counselor and attend counseling that will help you to decide if filing bankruptcy is the best option.

You will then be able to start filing out the proper forms and filing them with the court. Over the next few months or so you will be required to attend court and plead your case. The court will then decide if your bankruptcy is granted or not.

As you can see, this is quite a long process. However, you do not need to worry because as long as you are still undergoing the process, you are protected from debt collection by creditors.

Risks of a Chapter 7 Bankruptcy

Bankruptcy is not a simple solution when you do not want to pay your debts. In fact, recent changes in the bankruptcy laws has made filing bankruptcy more difficult and in some cases impossible.

If you file for Chapter 7, you will be at risk of losing your assets. Well the bad news doesn’t stop there. You are also going to end up with a damaged credit record. This is one of the worst things that can happen to you as it may not be easy for you to get loans and other forms of credit in the future.

However, according to new laws, you may be able to file for Chapter 13 instead of Chapter 7. This can be done if your income is deemed to be more than the set amount. The court will then decide how you can pay back the amount you owe.

Now its time to put the knowledge to the test! You should always remember that bankruptcy is not an easy way out. And if you are serious about filing for Chapter 7, you need to be prepared for the consequences.

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