Filing for Chapter 7 bankruptcy protection involves wiping out debt, and in some cases, liquidating your assets to pay off creditors. A Chapter 7 gives the person a financial fresh start.
The entire process takes between 3 to 5 months and can get you back on the right path quickly. For those who own homes and other significant assets, as well as those who have high income, it may not be the best option for debt relief; however, Chapter 13 protection might be your solution.
The benefits of filing a Chapter 7 bankruptcy begin immediately:
- Creditors cannot contact you to collect on a debt.
- Lawsuits are stopped (such as foreclosure proceedings and car repossessions).
- Wage garnishment and bank accounts freezes are lifted.
- All dischargeable debt is wiped.
- In the vast majority of cases, a person will get to keep all of his or her assets.
Creditors may petition the court to continue certain lawsuits, such as foreclosure actions and eviction proceedings, however they must obtain permission from the Bankruptcy Court before they can continue the lawsuit.
At the end of the process, most people will walk away completely debt free. There are only a handful of debts that are not discharged at the end of the proceeding. These debts include back child support, alimony obligations, and student loans. I add student loans here because, although it is possible to discharge them, the standard a person has to meet is extremely high, which makes these loans virtually non-dischargeable.
Note that taxes are not listed here; that is because some taxes can be discharged in a bankruptcy as long as they meet the standard and the process is followed correctly.
At the Law Office of Christian Veras, LLC we can help you discharge your debts through a Chapter 7. We will analyze your circumstances and give you candid advice if bankruptcy is the right solution for you. Check this article if you think it is time to consider bankruptcy.
DISCLAIMER: The purpose of this article is for educational use only. The information contained in it does not constitute legal advice and an attorney-client relationship is not created by reading this post.
Think about the following questions. If the answer is yes to one or more you might be in need of filing for bankruptcy relief.
If you answered yes to one or more of these questions you are in deep financial trouble or on the brink of deep financial trouble. You should seriously consider bankruptcy to help your situation.
What kind of bankruptcy should you file?
There are three types of bankruptcy relif: Chapter 7 (liquidation), Chapter 13 (debt repayment) and Chapter 11 (or reorganization).
Chapter 7 (or liquidation). This is where debtor’s assets are sold off to pay creditors. Some states require all the debtor’s assets to be sold, while others (like Florida) offer limited exemptions for homestead property, cars, and certain personal items. This type of bankruptcy is usually completed within three to four months.
Chapter 13 (or debt repayment). This kind of bankruptcy allows debtors to pay off creditors over a period of three to five years, while protecting property and certain possessions. The debtor must have a steady source of income for this type of bankruptcy to work.
Chapter 11 (or liquidation). This type of bankruptcy is used by individuals and business who do not meet the requirements for chapter 7 and chapter 13 bankruptcies. The debtor retains the assets and continues with the business and pays the creditor according to a plan approved by the bankruptcy court.
How to file for bankruptcy
You may file for bankruptcy on your own. However, it is best to use a competent bankruptcy attorney to help you navigate the complicated bankruptcy process and achieve the best outcome for your scenario. Before deciding whether bankruptcy is right for you, talk to a bankruptcy attorney.
Christian Veras, Esq.