Chapter 7 Bankruptcy: Get to Know the Basic Details

If you are tired of being in debt and getting harassing calls from creditors, it may be time to put a stop to it by filing chapter 7 bankruptcy. Before you file, you should make sure that this is the best route for you, as it can have lasting effects. Learn the basics about this pathway to starting over financially.

This route is known as liquidation, as you will be selling much of your property off in order to pay at least some money to bill collectors. You can expect it to take about six months, and the entire process needs to be approved by various people involved before you can complete it. Fortunately, you will likely only need to visit the court one time during the procedure, though you can expect to meet with your lawyer more often than that to get the details worked out.

You will need to sell many of your assets so that you can start paying off people you owe. In many cases, you will be allowed to keep your house, a car, any equipment you need for your job, clothes, and most furnishings in your home. However, anything extra that you do not appear to need will be sold so that you have extra money to offer your creditors. In chapter 7 bankruptcy, you will be expected to pay back at least a portion of your debts, as in most cases, you will not be forced to pay the full amount. However, the creditors must agree to the amount you plan to pay, as this is considered a compromise.

One of the best parts of chapter 7 bankruptcy is the automatic stay, in which creditors are prohibited from calling you in an attempt to collect their money. Many people get several phone calls per day, all from creditors filling up their answering machines with threatening or hostile messages if they do not pay past bills. Your lawyer will put a stop to those calls while you work out the chapter 7 bankruptcy.

Clearly, this kind of move is a good alternative to doing nothing and allowing bill collectors to harass you for years to come. It is a form of starting over so that you are no longer in debt. If you want to put a stop to harassing phone calls and wage garnishments, consider meeting with a lawyer to talk about going this route.