Ever wondered what Chapter 7 bankruptcy is? Well if you are, I think this article will help. Well, Chapter 7 bankruptcy is a type of bankruptcy that is available for people to file under the Bankruptcy Code. However, this type of bankruptcy is not available to everyone. Want to know more? Read on.
Chapter 7 Bankruptcy – Who Can File?
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.
Usually, filing for Chapter 7 may be best of one has a lot of assets. However, the decision on whether you are able to file for Chapter 7 is up to the court.
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.
After going thought this first phase, you will then be able to start filing out the proper forms and filing them with the court. After this, you are required to attend court to plead your case. This will be done over the next few months.
As you can infer, the whole process will take some time but as long as you are going through this 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.
New laws may require you to file a Chapter 13 instead of a Chapter 7 if your income is deemed to be more than the set amount. The court can decide that a repayment plan is better for your situation instead of actually clearing your debts.
Bankruptcy should not be looked at as a way to get out of your financial obligations because you will end up paying in the end in some way. Additionally, not every debt can be cleared through bankruptcy. If you take the process seriously then you should end up with the result you desire.