Chapter 7 Bankruptcy: Learn the Basics Before You File
If you are trying to decide which type of bankruptcy is best for you, it is important that you learn the basics of each chapter. Once you know the details about chapter 7 bankruptcy, you and your lawyer can decide if it is the best option.
If you are considering declaring bankruptcy, you will need to talk to a
lawyer to find out the method that is best for you. However, you should
get an overview of the available options and chapters before you
consider this pathway. Find out the basics of chapter 7 bankruptcy
before you start planning to file.
Chapter 7 is considered the most common type in the U.S., and involves
giving all non-exempt assets to a trustee, who then liquidates it into
cash so that the creditors can be paid back. The point of this is to
offer a fresh financial start for the debtor, who has to give up most
assets but gets the benefit of being considered debt-free afterward.
Aside from becoming debt-free, another bonus is that creditors will have
to stop contacting you after you file. This means that you can put a
stop to constant calls that harass you for money, so the sooner you
start the process, the better. The longer that the situation is allowed
to stay the same, the worse it will get, so it's important to speak with
a professional as soon as you suspect you may not be able to come back
on your own.
This pathway is a popular one because many people get in over their
heads in debt that they cannot control. In fact, one of the main reasons
for declaring chapter 7 bankruptcy in this country is medical bills
that are much too high to pay. Sudden unemployment, divorce, credit card
bills that have spiraled out of control are all other common reasons
for filing. If there or similar reasons have you thinking about this
path, you are not alone.
The chapter 7 bankruptcy will stay on your credit record for ten years,
but getting rid of the bills that may be piling up will likely save you
enough money and worry to be worth it. Your credit score may suffer at
first, but once you are relieved from the initial debt, you can work on
improving the score once again. It will literally feel like you have a
fresh start. Of course, you will have fewer assets than before, but you
are allowed to keep certain exempt property, which your lawyer can talk
to you more about. These professionals are trained to know which
property is exempt from foreclosure and which is not, so it is very
inadvisable to attempt to go through this process by yourself, as you
may make a fatal mistake that results in very valuable property being
needlessly lost. Additionally, some forms of debt cannot be discharged
via filing; for example, child support, IRS debt and student loans will
follow you to the grave.
If you have decided that chapter 7 bankruptcy is the best route for you,
it is time to find out if your attorney agrees. Once you both decide on
this option, you can get started planning the process. The sooner you
file, the sooner you will be free from debt, which is why learning about
the different options available before you see a lawyer is advised.
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Chapter 7 bankruptcy in Annapolis doesn't have to be the end of your financial life; a qualified professional can guide you through the process and give you detailed advice on how to persevere and recover. Learn more here: http://www.russacklaw.com/.
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