Chapter 7 Bankruptcy - The Real Deal
Jay Anderson
While there are many different types of bankruptcy, the most common type is Chapter 7 Bankruptcy, which is the kind of that most people think of when they consider filing bankruptcy. Each type or chapter has its own unique set of rules, regulations, requirements, as well as restrictions.
This is something that a consumer might consider when they have a mountain of debt that they cannot see over the top of. Although there are usually other options, this usually comes about from your current circumstances, which interestingly enough in the majority of cases, is not due to financial mismanagement.
You need to be aware, however, this is not going to be a cake walk. Although filing bankruptcy in past years was quite simple, it now requires a massive amount of forms to be completed and takes months to go from start to finish. It is not something that can happen overnight, so it will take significant planning on your part.
If you miss a step in the mountain of forms being filled out, this will typically put you all the way back to square one to start the process over from the beginning, so it is important that you understand bankruptcy law before you start. The court will look at your financial records in great detail, and then make a ruling. In other words, just because you want to file bankruptcy, the court may not allow it, it needs to be approved.
You need to have a good understanding of where all your debts come from. There are some types of debts, such as an IRS lien or student loans that cannot be discharged by filing bankruptcy. If a large percentage of your overall debt is the type of debts that bankruptcy will not discharge, you have little to gain by filing.
Also consider the fact that a bankruptcy on your credit report is going to stand out like a huge red flag for the next 7 to 10 years. This will affect your ability to get a job, get good rates on car insurance, and of course get new credit established in the future. You can still get credit but will almost certainly be paying a much higher interest rate since you will be considered a higher risk.
Are you really prepared to liquidate or sell off most of your assets? That is a requirement of Chapter 7 bankruptcy and there is no way around that. One option is to consider a different chapter, but then with the other chapter of bankruptcy that is typically used for consumers, your debt is not wiped out, but rather merely reorganized at lower interest rates and lower monthly payments. While this may give you the financial breathing room you need, your debt remains, although your assets are not sold off.
Especially in light of the recent changes in the bankruptcy laws, you are strongly encouraged to work with a qualified bankruptcy attorney when doing this. They can help with the paperwork, advise you as to what to expect, and also outline other possible options and alternatives you may not have thought of. The money spent on an attorney can more than pay for itself in terms of time spent and potentially assets not liquidated.
For more insights and additional information about http://www.bankruptcy-data.com/ Chapter 7 Bankruptcy as well as getting a free bankruptcy evaluation from a qualified attorney local to you, please visit our web site at http://www.bankruptcy-data.com
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