The Most Essential Parts of Chapter 7 Bankruptcy Explained for Newcomers
Chapter 7 bankruptcy is one of the more popular ways to deal with overwhelming levels of debt — of the 1,071,932 bankruptcies filed last year across the United States, some 728,833 of them were Chapter 7 bankruptcies.
So if you are having trouble staying afloat with your debts, it might be a good idea to consider seeking help with filing bankruptcy with a Chapter 7 bankruptcy attorney. But before you do this, be sure to get all the Chapter 7 bankruptcy facts — the good and the bad.
Here’s a quick look at Chapter 7 bankruptcy explained for people who are completely new to the world of bankruptcy law:
Chapter 7 bankruptcy liquidates your debts
Unlike the other types of bankruptcy, which are essentially debt reorganization plans that set up a repayument schedule for you, a Chapter 7 bankruptcy completely eliminates your eligible debts. Apart from a few types of debt that can’t be discharged, such as student debt, you won’t have to pay back the debt you’ve accrued after filing for bankruptcy.
There are consequences to filing Chapter 7 bankruptcy
Because Chapter 7 bankruptcy allows you to get rid of all your debt, there are certain negative consequences for doing this. You will likely have to give up some of your possessions to the bankruptcy court, apart from necessities like your house and your car. In addition, a bankruptcy filing will appear on your credit report for 10 years — which can have a negative impact on your ability to get approved for loans and credit in the future.
Chapter 7 bankruptcies allow people a fresh financial start
Having too much debt to handle doesn’t make you a bad person — it just means you made a few mistakes. If creditor harassment and unpayable bills are bringing too much anxiety and stress into your life, it may be time to look into how Chapter 7 bankruptcy can give you a new start and a chance to build up good financial habits again.
Any other essential facts about Chapter 7 bankruptcy explained that weren’t included in this article? Feel free to share by leaving a comment below. References.