Everything You Need to Know About Chapter 7 Bankruptcy
Chapter 7 Bankruptcy or liquidation bankruptcy helps you to clear many unsettled debts. Bankruptcy is a condition where you have a mountain of unpaid bills, and you have run out of your income. If you are bankrupt, then filing a Chapter 7 bankruptcy case will help you save yourself from going to the streets. More details about Chapter 7 business bankruptcy are discussed below.
Working on Chapter 7 bankruptcy
On filing a Chapter 7 bankruptcy, the court will cast a temporary stay order on your debts. Chapter 7 stops the creditors from harassing you for settlements. Abiding by the Chapter 7 bankruptcy filing, the court will sell some of your possessions and repay the creditors. A courtroom representation will then be followed, where you will have a meeting with the creditors. The Chapter 7 bankruptcy case does not allow you to keep any assets.
Eligibility criteria for Chapter 7 bankruptcy
Before filing the case, you must complete a credit counselling course from a verified credit counselling agency within 180 days of filing the case. Your average during the past six months should be less than the median income. You have to wait for 181 days if the court dismisses your Chapter 7 bankruptcy filing.
The debts that you do not have to pay in Chapter 7 bankruptcy
Chapter 7 will help you get your hand off the unsecured debts like your medical bills, personal loans and credit card debts. The debts that will not be forgiven under Chapter 7 are child support, tax debts, alimony, penalties, court fee, personal injury debts if you failed as a defender, and homeowners association fee. Your creditor can object to some debt forgiveness; in those cases, you will have to make the payments. Chapter 7 also allows you to discharge the debts on some secured loans.
Generally, the Chapter 7 bankruptcy case takes six months from filing the case to the end result. The time may extend depending on the circumstances that may arise during the course of the case.
A bankruptcy case can take a toll on your life. It is physically, emotionally and financially draining. But it is the best option if you do not want to let go of all your possessions. Filing a bankruptcy can be a point where you can start your life once again.