Chapter 7 Bankruptcy
In many cases a debtor gets so far underwater that they may be forced to think about filing for bankruptcy.
However, this is in any case a last alternative. It remains on one’s credit report for at least 7 years and can make it much more difficult to buy a car, to buy or even rent a home, or to apply for any kind of credit or loans, et cetera.
Chapter 7 and Chapter 13 bankruptcy are the two most common types of bankruptcy. Now we’re going to discuss Chapter 7 bankruptcy information.
With Chapter 7 bankruptcy there is no repayment plan included. Any assets that the debtor owns that are not exempt are sold off to pay off debtors and nearly all debts are wiped clean. This varies from state to state. These assets could include computer, television, car, clothing, furniture,house, jewelry, bicycle, etc. There is a long list of what may be confiscated and auctioneered.
After Chapter 7 bankruptcy the individual still is likely to owe student loans, income taxes, child support, alimony, and certain court judgments including accidental injury caused by drunk driving.
Even though it may seem perfect to wipe off all of individuals debts and get a new start, Chapter 7 bankruptcy isn’t a perfect solution in any case.
And as a matter of fact, several people may find that their earnings are too high to qualify for Chapter 7 bankruptcy, in which case they would have to file for Chapter 13 bankruptcy, which needs a 5 year payoff plan.
The judge will check a number of things when deciding whether to allow for filing a Chapter 7 bankruptcy. They do not want debtors to get deep into consumer debt, such as buying expensive toys like boats, big screen televisions, et cetera – and then attempt to eliminate their responsibilities with a bankruptcy.
A few mitigating factors would be medical bills, unemployment, disability, et cetera. For certain there can be legitimate causes why a someone would have to file for Chapter 7 bankruptcy.
It is up to the bankruptcy judge as to whether he will allow the filing of a Chapter 7 bankruptcy plan. The judge has the option of changing the case to a Chapter 13 bankruptcy or declining it altogether.
So, in any case it’s a good idea before filing any type of bankruptcy to go speak to a bankruptcy attorney to get any legal advice which type of bankruptcy is most suited to file, or whether you can get better options than a filing bankruptcy.
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