If you are considering filing for bankruptcy, you already know that it's one of the most difficult decisions you'll ever have to make. But, bankruptcy gives individuals with financial issues an opportunity to start fresh, and it may be a last resort for some. There are two different types of bankruptcies that individuals can file, Chapter 7 and Chapter 13. This article will give you an overview on Chapter 7 bankruptcy, and why it may benefit you and your personal situation.
A Fresh Start
When individuals file for Chapter 7 bankruptcy, the individual goal is to allow the debtor a fresh new start. This type of bankruptcy eliminates certain debts, subsequently freeing the debtor from personal liability for the debt. It's important to keep in mind that some types of debt are not dischargeable, such as student loans, taxes, and child support. If you have liens on your property, like a mortgage or tax lien, they remain active even after the completion and discharge of Chapter 7 bankruptcy.
Retains Future Income
Any property or income that you receive after you file for Chapter 7 is not included as part of the bankruptcy estate. However, certain property that you acquire within 180 days after filing for bankruptcy does become part of the estate. This time frame is generally applied to any property you receive from a divorce settlement, proceeds from a life insurance policy, or inherited property.
No Limitations of Debt Total or Repayment Plan
Chapter 7 bankruptcy does not impose a limit on the amount of debt you may have, while Chapter 13 bankruptcy does have a limit. Also, Chapter 7 debtors do not have to repay debt in any type of court-approved repayment plan. Once the debts are fully discharged, the debtor is under no obligation to repay any of the balance due on the debt. It's important to note, however, that certain assets that become part of the bankruptcy estate will be liquidated in order to pay back as much of your debt as possible.
Quick Discharge of Debts
In a typical Chapter 7 case, the debts can be discharged in as little as a few months. The trustee will distribute your liquidated assets to your unsecured creditors, and once that's finalized, the court will discharge your bankruptcy.
For more specific information regarding your own particular situation, it's best to consult with an experienced bankruptcy attorney like Morrison & Murff, who can properly advise you based on your own financial status.
Share25 February 2015
When I was a child, I regularly visited a local department store. At this lovely business establishment, one could purchase many items including clothing, shoes, and even hotdogs. Sadly, due to competition and other factors, the store closed its doors for the last time several years ago. If the owners of the store had considered bankruptcy options, they might still be meeting customers’ needs today. On this blog, you will learn how to resurrect your business with available bankruptcy alternatives. Regardless of whether you choose to liquidate your assets or reorganize your entity, the opportunity to remain in operation might be an option for you.