About Chapter 7 Bankruptcy
Chapter 7 bankruptcy is one type of bankruptcy that is available for people to file under the Bankruptcy Code. This form of bankruptcy is not available to everyone. Only certain people can file this type of bankruptcy and only people in certain situations should someone file this type of bankruptcy.
Chapter 7 Bankruptcy – Who Can File?
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 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 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.
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.
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.
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: debt, Business, finance, loan