What You Should Know About Filing Chapter 7 Bankruptcy
February 15, 2010 advice, Finance, money
You need to come to a couple of big decisions before you can file for bankruptcy and the most important of these is whether to file for Chapter 13 bankruptcy or Chapter 7 bankruptcy. The most common of these two options is Chapter 7 bankruptcy and before you decide to take this alternative you must learn some facets about it so that you are sure it is the right option for you.
To start, the thing you must understand is that the decision of which chapter to file is not your choice. After a detailed documentation of your income and assets is given to the courts, then it is the court’s determination as to which chapter you can file. As a matter of fact, with the new bankruptcy laws in place, there is even a chance that you will not be allowed to file for bankruptcy.
Also referred to as liquidation, and this type of bankruptcy is the standard choice for most individuals. This type of bankruptcy will eradicate your current financial obligations, but you need to remember that the bankruptcy court has the right to sell or liquidate a portion of your property or assets as a means to pay off the debts that you owe to your creditors.
Likewise you must be aware that even with Chapter 7 Bankruptcy, there are particular types of financial obligations that cannot be wiped out, so if your debt loads consist of a great deal of this kind of debt, getting approval to file is not going to assist you much at all.
This option is so common because generally the person owes so much money to debt holders that it is not possible to file for bankruptcy and then expect the debt to be completely ignored. It is oftentimes the case that the individual will need to release a portion of their assets such as their car and even their home in order that the court can recover some of the debt that is owed to creditors.
The process for filing for Chapter 7 bankruptcy can be really complicated but if you have completed your research and have a general idea of what you are doing, any problems you encounter should be negligible. The first thing you must do is closely examine your debt. Determine to the exact figure how much money you owe and who your debt holders are. Secondly, you need to examine all the alternatives and ensure there are no other options available to you. For example, could you find another job or save enough money in order to avoid going bankrupt? If the answer is no to this and other choices then your only option is to then file for bankruptcy. Bankruptcy should only be employed as the last resort to resolve your severe financial problems.
Now you need to be certain that you are in fact eligible to file for Chapter 7 bankruptcy. Once you have confirmed this and are eligible then you may start finishing the pertinent forms and arranging a meeting so that you can learn all aspects you need to know about the process and the next steps you need to take. You will be required to also work out arrangements for any secured debts and file any motions or protests as required.
The next stage is being given your discharge and the process is nearly complete. If you are not entirely comfortable with working with this procedure by yourself then you may want to find someone to give you some help. You can find some excellent professionals who are well versed in the bankruptcy process and who will ensure you are doing it right and indeed it is the correct option for you.
