Bankruptcy Articles

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.

Eligibility For Chapter 7 Bankruptcy

No everyone can file for Chapter 7 bankruptcy. It is only available to individuals and also businesses. If you want to file for 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.

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.

What are the Risks?

Thinking of an easy way out to settle your debts? Count filing for Chapter 7 out. This should be your last resort as recent changes in the bankruptcy laws have made bankruptcy almost impossible.

Filing for bankruptcy has quite a number of negative effects. Firstly, you can lose your assets. Other than that you will have a damaged credit record. This is especially bad as it may be difficult for you to get loans and credits in 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.

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.

Tags: Bankruptcy
Filed under: Bankruptcy