When You Can File Bankruptcy Chapter 7


Bankruptcy chapter 7, also referred to as liquidation bankruptcy, because the lenders often have the right to take assets and sell them to pay off debts. This can include your home, car, boats, or any other assets that might have any value or equity in them. Bankruptcy chapter 7 is not something to be taken lightly, but it is a way to get a chance to start over, but ruins your credit for up to ten years. Often, there are other alternatives, but most people don't understand bankruptcy law enough to know the better choice.

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Due to changes in laws, it is also harder to qualify for Bankruptcy Chapter 7 than in years past, especially if you still have income. It used to be that it was a way to get rid of unsecured debt like credit cards and still be able to keep the assets you wanted to pay for. Now, many debtors find themselves being put in a Chapter 13 reorganization bankruptcy by the courts, if there is a way for them to repay the debt over a payment plan. This still ruins your credit for 10 years, just like Chapter 7 bankruptcy, but draws out the payments over a longer period of time, normally 5 years. The key point here is that with Chapter 13, you still have those debts, they are not wiped out.

Bankruptcy Chapter 7 can be a way for unemployed persons to eliminate unsecured debt and collection calls, but there is still no guarantee that the court will go along, especially if it appears you were living off of the credit card debt in the few months preceding your filing. The court may deem that you had no intention of paying the credit cards off and that the bankruptcy was "premeditated", in which case you may be thrown into Chapter 13 bankruptcy as a reorganization.

Filing for bankruptcy Chapter 7 is often a choice that many debtors will choose out of frustration from the collection calls and garnishment threats of the creditors. While the bankruptcy filing will stop the harassment, you may find that your finances are taken over by the court and your ability to have any financial freedom to make your own choices are taken away. Some people go into bankruptcy without looking at other options to pay off debt or work with the lenders that may save their inability to borrow for the next ten years.

The main thing to keep in mind is that you need expert advice when it comes to something as drastic and far reaching as filing for Bankruptcy Chapter 7. You will probably need an attorney to sort through your options and all the red tape, as the laws can vary from State to State. It can also depend on the assets that you hope to keep or get rid of, as to what option is going to be the best. You really need a bankruptcy evaluation to see if filing bankruptcy is the best choice in your situation.

There are many people who file Bankruptcy Chapter 7, but a good percentage of them do not need to take this drastic step, which can cost over a thousand dollars, which could be applied to bills. By getting a bankruptcy evaluation or consulting with an attorney, you can make an informed decision that may save you money, and your future borrowing ability. There is a free bankruptcy evaluation available from a qualified bankruptcy lawyer at our web site if you want to find out how your financial situation stacks up.


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