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.
Who Can File Chapter 7 Bankruptcy?
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.
In some cases, though, Chapter 7 may be best even if someone has more assets. The court, though, may rule that a person can not file a Chapter 7 if their assets are high enough to clear their debt.
The Process
The process of filing for a Chapter 7 may be long as you are required to collect all the information about your debts and your financial situation. Other than that, you’re also required to meet with a counselor and attend counseling.
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?
Bankruptcy is not a simple solution when you do not want to pay your debts. In fact, recent changes in the bankruptcy laws has made filing bankruptcy more difficult and in some cases impossible.
If you file for Chapter 7, you will be at risk of losing your assets. Well the bad news doesn’t stop there. You are also going to end up with a damaged credit record. This is one of the worst things that can happen to you as it may not be easy for you to get loans and other forms of credit in the 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.
Now its time to put the knowledge to the test! You should always remember that bankruptcy is not an easy way out. And if you are serious about filing for Chapter 7, you need to be prepared for the consequences.
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