Highlights of Chapter 7 Bankruptcy
Written by Joe Macker on June 20th, 2008Ever 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?
Wondering who can file for Chapter 7 Bankruptcy? Well, it is only available to individuals and some businesses. Assets need to be limited to those that can be claimed as exempt in order to file for Chapter 7 bankruptcy.
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 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.
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.
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.
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