There are several options when it comes to bankruptcy. It can be very confusing to understand the type of bankruptcy best for your situation. Let’s have a close look at some of the features of chapter 7 bankruptcy and whether it’s best option for you or not, and whether you should talk to a chapter 7 bankruptcy attorney.
Chapter 7 bankruptcy is also known as liquidation bankruptcy. More than 65 percent of all bankruptcies are under Chapter 7. It can rid you of all your outstanding debts, but in some cases courts can force you to liquidate few assets to pay for your lenders. However, in most of the cases lenders will get only pennies on the dollar, and all remaining debt is waived off. So you won’t have to pay anything later on.
Chapter 7 bankruptcy requires just one visit to court. Mostly, courts will order you to take a credit counseling course endorsed by a US trustee. Be aware of laws concerning bankruptcy as the may vary from state to state. Therefore, it is important to hire a bankruptcy attorney who knows all about the bankruptcy laws of your state as they can make the process smooth for you.
Chapter 7 bankruptcy can be filed every 8 years, and it will stay on your credit report for 10 years. During this time, you won’t be able to get any credit from most of the lenders. Filing this bankruptcy can be either involuntary or voluntary, and is often initiated by the creditors.
Not everybody is eligible to file for Chapter 7 bankruptcy. If you’ve been discharged from bankruptcy in the last 6-8 years, you are not eligible to file under Chapter 7. The courts can review whether they can file under Chapter 13 instead. In this, there is a repayment plan and all outstanding debt is not canceled by the court. This depends on things such as debt load, income, and expenses.
Latest rules and guidelines are used to determine whether a person has sufficient income to repay his or her debts or not. If you’re a disabled veteran and your debts have racked up while you were on job, or your financial burden is due to business loss, you can still file under Chapter 7.
Chapter 13 bankruptcy is different from Chapter 7 bankruptcy. It is actually a reorganization plan or all those who are interested in paying off their debts over a period of time (three to five years). This option is chosen by people who have sufficient income to cover their living expenses and sufficient left over to pay for their debts.
Chapter 7 bankruptcy is one of the best options for al those who have an overwhelming amount of debt and don’t have sufficient funds to repay their debts. If you want to file under Chapter 7, you will be allowed to keep some of your assets, but you may also have to sell some of your possession to pay back your debt.
Once you file your papers, the court will decide whether you are eligible to file under Chapter 7 bankruptcy, or whether Chapter 13 is feasible. It is a fairly quick process and will help end our financial worries and collection harassments.
Chapter 13 bankruptcy further explanations can be found at http://www.totalbankruptcy.com/chapter-13/overview.aspx.