Monday, March 18, 2019

What Does Chapter 7 Bankruptcy Involve?

When faced with the realization that your debt far outweighs your assets, you may need to step back and take stock of your options. One choice is to pay down the debt one item at a time until you finally are through with it. The other alternative is to declare bankruptcy and get a better handle on what you owe and how you pay it. When faced with the likelihood of a bankruptcy filing, you need to choose which option is right for you. The outcome of Chapter 7 may be appealing because it rids you of all debt.

What Happens Under Chapter 7? 
When filing bankruptcy under Chapter 7, you must meet specific federal and state guidelines for income and assets. These are in place to help decide if this chapter or another is best for your particular case. You want the most help, and a chapter 7 lawyer orlando fl can provide you with options that suit your individual needs. If you opt to proceed under Chapter 7, be prepared to turn over all assets including:
  • House
  • Cars
  • Recreational vehicles
  • Cash retirement accounts
These rules are different from state to state, so check to see what is exempt in yours. The property is seized and sold to pay creditors for the debts owed to them.

What Happens to the Debt? 
Because Chapter 7 requires a surrender of your assets, it eliminates all your debt. This blank slate approach has a bit of a backlash - it stays on your credit longer. The minimum time Chapter 7 bankruptcy remains on your credit report is ten years. The reason behind this is because some creditors may not have gotten any payment, thus affecting your creditworthiness longer.

Declaring bankruptcy is not a decision to take lightly, but if it helps to remove the stress and strain of bill collectors and debt, it may be worth looking into. It is best to check out your own state's guidelines and perhaps even talking with an expert before taking the steps of moving forward.

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