Chapter 7 Bankruptcy Is a Quick Way to Rebound Your Financial Situation

Making the decision to file for bankruptcy is a pain-staking process that normally comes after exhausting all possible options in meeting financial obligations.

If looking to emerge from the court proceedings relatively quickly and not have any lingering date, than filing for Chapter 7 bankruptcy may be the right option for you. In a Chapter 7 case, all non-exempt items of the petitioner are sold and the proceeds of the sale are used to pay creditors. Because the petitioner normally has few or no assets, the bankruptcy filing provides the individual with a fresh start relatively quick.

Chapter 7 is also known as liquidation, which means converting assets into cash. It is the most common form of bankruptcy filings, making up as much as 65 percent of all bankruptcy cases. The quick bankruptcy proceeding can be even more rapidly completed if no protests to the filing are put up by any creditors. In a Chapter 7 case, most, if not all debts, are erased within months of the individual's attorney filing the required paperwork.

When filing under Chapter 7 bankruptcy protection, a trustee is appointed to collect and sell all the petitioner's non-exempt assets. Chapter 7 differs from other bankruptcies in that the petitioner does not need to make a payment to the case trustee.

Even though under the law the petitioner can lose all of his or her assets when filing under Chapter 7, that often is not the case. Speaking with your bankruptcy attorney can clarify any concerns you have with bankruptcy filing and ensure that Chapter 7 is the right financial option for you.

There are 19 classes of debt that are discharged when Chapter 7 is granted. Once the bankruptcy is declared, the petitioner is released of any debts eligible to be discarded. Under a reaffirmation agreement, the petitioner can keep his home or car and simply continue to make payments on the asset. This is allowed because the U.S. Bankruptcy Code allows petitioners to retain assets in some cases.

Chapter 11 bankruptcy might be better for individuals who have their own business or are a part of a corporation or partnership.

Also, individuals with a regular income stream may be better opting for Channel 13 bankruptcy filing. Issues regarding your individual situation can be ironed on through a consultation with a bankruptcy attorney.

And once you are granted a Chapter 7 bankruptcy or a Chapter 13 financial re-emergence plan, you cannot file a Chapter 7 request for eight years.

The biggest thing you have to address before filing for bankruptcy is to determine if you, in fact, do need to file the financial reorganization step. This is where a bankruptcy attorney can help. He or she can help you evaluate if a bankruptcy filing is in your best interests to get you out of financial distress. And transparency is vital to the process. You need to let your attorney know of any and all assets and all financial issues as once the bankruptcy proceedings begin all your financial information and assets will be examined.