Ready to file a chapter 7 bankruptcy?
Within the next 5 minutes, I will explain everything you need to know about chapter 7 bankruptcy.
Nevertheless, if you already know about it and just want to file a chapter 7 bankruptcy straight away, click on the provided link to get the best chapter 7 bankruptcy help.
What Is Chapter 7 Bankruptcy?
Simply put, chapter 7 bankruptcy is such that allows you as a business to sell your unexempted assets in order to clear all types of unsecured debts with your creditors. It is also called liquidation bankruptcy because filing one essentially means that your business is past the stage of reorganization or you’re far behind on your bills.
How Does It Work?
Once the bankruptcy is filed in the court of law, a stay is placed on all your debts. By so doing, your creditor no longer has the right to place foreclosure on your home, make an eviction on your utilities, or repossess your property. Instead, the court takes legal possession of your properties and a bankruptcy trustee is appointed to review all your assets and finances to determine what part is needed to be sold to pay off your debts. The whole process is usually completed within a timeframe of 4 to 6 months.
What Debts are Discharged?
Virtually all unsecured debts can be discharged in chapter 7 bankruptcy. You may also discharge unsecured personal loans, medical bills, secured loans backed by collateral, and credit card debts. On the flip side, the debts not discharged in chapter 7 bankruptcy include;
- Student loans
- Alimony
- Some but not all tax debts
- Child support
- Personal injury debts
- Court penalties
- Fees you’re owing an homeowners association
Steps On How To File For Chapter 7 Bankruptcy
- Attend counseling course to receive 100% enlightenment about it
- Obtain and file your bankruptcy form
- Get your file accepted by a court of law
- Send all the required documents to the bankruptcy trustee for verification
- Attend meetings with your creditors
- Complete a budget counseling course from a counseling agency
- Await your discharge notice
While that may seem simple, filing a chapter 7 bankruptcy has its own pros and cons as illustrated below.
Advantages Of Chapter 7
- You are automatically saved from the troubling actions of your creditors
- Chapter 7 bankruptcy is easy to understand and file
- It forces you to be more financially disciplined. You become more skeptical about borrowing and strategize how to create in-house revenue-generation sources
- You are most likely to be allowed to keep the properties that matter most to you
Disadvantages Of Chapter 7
- Chapter 7 bankruptcy can remain on your credit reports for up to 10 years, affecting your credits
- A whole lot of your properties are taken from you
- Your luxurious possessions can be taken too
- Getting a mortgage becomes difficult
- Chapter 7 can only be filed once every 6 years
- The court can decisively convert your chapter 7 to chapter 13, which is a heavier one
