Chapter 7 Bankruptcy - The Real Deal

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.

But keep in mind that such a filing does not come automatically or without sacrifice. As opposed to how easy things were in previous years, the new bankruptcy laws make it significantly more difficult. You cannot, for example, just wake up one morning and decide to file Chapter 7 bankruptcy, and have it done by dinner time.

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.

Be very aware of the nature and source of your financial obligations. As an example, there are some kinds of indebtedness such as federal student loans and IRS liens that will not be discharged via bankruptcy. In looking at your finances, if you find that a good percentage of your debt is due to these types of things, be aware that filing bankruptcy is not going to help you at all since those debts will remain.

Another factor to consider is that a bankruptcy is going to stick out like a sore thumb on your credit reports for the next 7 to 10 years. This can affect your ability to be considered for a new job and open new credit accounts. While you will still be able to get credit, you will need to prove yourself all over again, since you are now considered high risk and the interest rates you will be assessed will be much higher than normal.

Have you thought of how your life will change if you need to liquidate most of your assets? That is what is required with certain chapters of bankruptcy, where your assets are sold off in order to satisfy your debts. Other chapters do not require asset liquidation, but then your debts are not wiped out, but merely reorganized at lower payments and lower interest rates to make is easier for you to meet the obligations.

Filing Chapter 7 bankruptcy is not an easy task, and especially with the new laws, it is highly recommended that you use a reputable bankruptcy lawyer to handle the paperwork for you, as well as making intelligent suggestions and even looking at alternatives. The money you spend for the attorney will likely more than pay for itself in terms of the time you invest as well as the assets you are able to retain after all is said and done.

Article Source: http://www.share.onlypunjab.com

For more insights and additional information about Chapter 7 Bankruptcy as well as getting a free bankruptcy evaluation from a qualified attorney local to you, please visit our web site at www.bankruptcy-data.com

Please Rate this Article

5 out of 54 out of 53 out of 52 out of 51 out of 5 

Not yet Rated