How Chapter 7 Bankruptcy Can Help YouIn situations where there has been financial hardship, people sometimes declare bankruptcy. Chapter 7 bankruptcies are an option in some cases because they are the easiest and fastest form typically available to individuals, married couples, partnerships or corporations. Chapter 7 bankruptcy is akin to a liquidation process where the debtor's assets are sold by the trustee. The proceeds of the sale going to the creditors.
Eligibility to file for Chapter 7 bankruptcy is established by a means test which assesses current income minus expenses and puts that into a formula to determine whether you the requirements. There is also a required financial counseling class that must be taken in order to participate in the proceedings. Many people going through this process do qualify. However, things which will prevent you from qualifying include having a previous bankruptcy within the last 8 years, or being dishonest in supplying the requested information on the forms.
During the bankruptcy proceeding, the debtor is responsible for filling out all information honestly on the bankruptcy forms. They also must appear at the meeting of creditors, and provide any documents or information that the trustee requests. Wiping out debts is what Chapter 7 is intended to do. It is helpful that it is a fast type of bankruptcy proceeding which typically works well if you have medical bills, credit card debt or vehicle repossession concerns.
Chapter 7 bankruptcy will discharge those debts forever. Another good thing is that this process is not difficult. All you need to do is get a bankruptcy lawyer to help you through the process. Then, once you declare bankruptcy, creditors cannot attempt to call you to collect money to pay the debts anymore.
Another good thing about chapter 7 bankruptcy is the fact that there are exemptions that provide protection for some assets you might have such as your home, car, clothes and other necessities. Granted, each state has its own rules pertaining to exemptions. Also, sometimes the exemptions are only up to a certain amount of money. Talk to your bankruptcy lawyer for more information about state exemption rules that might apply in your own particular case.
However, the wonderful thing about exemptions is that if assets are exempted, it usually means that you do not have to worry about losing them. Another thing that is helpful is the fact that Chapter 7 bankruptcy will not necessarily render you unable to get credit. It is true that the bankruptcy will be on your credit report, however, you will still be able to get credit most of the time because there are companies that cater to individuals who have had bankruptcy. Granted, you may have to pay a higher interest rate for credit cards and various loans.
About the Author:
Nick Messe is president of Lead Frog LLC. In the Milwaukee and Waukesha area Michael Burr specializes in bankruptcy and debt relief services. Milwaukee Chapter 7 bankruptcy is an effective way to eliminate many types of debt and have a fresh financial start - www.burrlawoffice.com