A Look at a Chapter 7 Bankruptcy

A Chapter 7 bankruptcy is the most common form of bankruptcy and is often thought of as a complete bankruptcy or a straight one. Your circumstances should dictate which type of bankruptcy you should file for. In some instances, a Chapter 7 may enable you to wipe out all of your debts and not have to repay them. In other instances this is not the case. The former would allow you to have a fresh start financially and would eliminate much of the stress that you are experiencing.

This type of bankruptcy is your best option if you are a person who does not have a great number of assets such as investments, property, or a large amount of equity in your home. The reason for this is because under a Chapter 7 bankruptcy a trustee has the right to liquidate your assets if the assets are not able to be protected by the bankruptcy exemptions in the state you reside in. Often however Chapter 7 cases are such that they are considered to be no-asset cases and no property is seized. It is essential that you consult with a bankruptcy lawyer in your area to find out which of your assets would be protected if you were to file for this type of bankruptcy.

Having some idea what you are getting yourself into when you file for a Chapter 7 bankruptcy can be helpful to you. At a time when you are feeling an overwhelming level of pressure the last thing you want is to be unprepared for what is to come.

There are federal laws as well as state laws that provide exemptions with regards to property for those individuals who go bankrupt. The property that can be claimed for exemption status varies from one state to another. This is why hiring a bankruptcy attorney to assist you with the proceedings is so important.

In most states when you file a Chapter 7 bankruptcy you get to keep your items of clothing, your personal effects and the household goods that you own. These are almost always protected by either federal or state exemptions. If you are making regular mortgage payments then you should be able to keep your house. If your car is financed and you are making regular payments then you should be able to keep it as well. The exemptions that come about in a Chapter 7 bankruptcy most often protect the amount of equity that has been built up in each one of the assets you have.

It makes a great deal of sense to file for Chapter 7 if your monetary worries have gotten out of control and you are feeling extremely burdened by the weight of your financial woes. It is often the very best way to get rid of a large assortment of unsecured debts as rapidly as possible. As well, if your wages have been garnished then this can be turned around when you file for Chapter 7. However your child support payments are still expected to continue.