February 28, 2009
Why file for Chapter 7 Bankruptcy
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.
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 this is done, you will then stat filling up some forms. After filling up the forms, you have to attend court to plead your case. The decision will be up to the court.
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?
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.
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.
It is a good thing there is Chapter 13. You can file a Chapter 13 instead of a Chapter 7 if your income is deemed to be more than the set amount. So how do you pay back the amount? Well, the court can decide a repayment plan for you!
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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