Highlights of Chapter 7 Bankruptcy
June 21, 2008
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.
Who Can File 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.
Even though sometimes the court may rule that a person is not able to file a Chapter 7, at times, it may be one of the best moves you can make.
The Process
The process of filing for a Chapter 7 may be long as you are required to collect all the information about your debts and your financial situation. Other than that, you’re also required to meet with a counselor and attend counseling.
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.
The whole process can last quite some time, but during the process you are protected from debt collection by creditors.
Any Risks Involved?
If you think bankruptcy is an easy way to clear your debts, think again. Recent changes in the bankruptcy laws has made filing bankruptcy more difficult and in some cases impossible.
You are at risk of losing your assets because they can be taken to repay debts. You are also going to end up with a damaged credit record. The effects of a bankruptcy can last seven to ten years and can really hurt your ability 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.
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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