What is Chapter 7 Bankruptcy?
Chapter 7 bankruptcy is the most common form of bankruptcy in the United States. It involves the discharge and or liquidation of a debtor’s assets in order to settle outstanding debts. However, it can have some negative consequences. Thus, a decision to file should be taken carefully.
If you decide to proceed, hiring bankruptcy attorney to help you navigate the sometimes complicated procedures involved is typically the best forward. With our experienced bankruptcy attorneys, we strive to educate you, as well as make the Chapter 7 bankruptcy process as easy as possible. We will also determine if you are eligible to file at all. If you have had a filing in the previous 6-8 years, then you are barred from doing so.
What Happens After Filing for Chapter 7 Bankruptcy?
Upon filing, you will have to list all of your debts, creditors, assets and income. If a judge determines you have too much money leftover after paying monthly debts, he may reject your Chapter 7 petition and direct you to file for Chapter 13. Under Chapter 13, there is no liquidation, rather a restructuring of the debt.
Generally what happens next is the court appointed trustee will attempt to collect as much money possible for your creditors. There are, however, assets that may be exempt from collection in your state. These typically include your home, vehicle, and social security payments.
What occurs in most cases is there is no liquidation of assets and the debtor has his debts discharged completely. This is especially the case if the assets are worth little or are difficult to liquidate. Having a lawyer may help produce this outcome.
Not all debt can be discharged though. For example, child support orders are debts owed for the life of the parent. Student loans are also exempt from discharge (except in very rare cases) as well as government taxes you owe. For a complete list of what can and cannot be discharged, contact us today to schedule a Chapter 7 bankruptcy consultation.
The main negative consequence of Chapter 7 is that it stays on your credit report for 10 years. This is in contrast to filing under Chapter 13, which only stays on your report for 7 years.
10 years with a bankruptcy black mark may make life in the modern world difficult. Renting or buying a home will both be difficult since credit checks are an integral part of the housing market. The same holds true for automobiles. However, many find a way to make life work after filing, which is much easier than living under constant pressure from creditors.
There are positives and negatives to filing Chapter 7 bankruptcy. Having an experience attorney by your side to help navigate this often confusing bankruptcy law is best. To speak with an experienced bankruptcy attorney today, call our offices to schedule a consultation. You will immediately see why our team has been so successful in helping Long Island residents just like you with their bankruptcy needs.