Chapter 7 Bankruptcy
Chapter 7 Bankruptcy
What Exactly is Chapter 7 Bankruptcy?
When a person goes through Chapter 7 bankruptcy, they come out of it without all or at least most of their debts. This is a convenient vehicle for getting a fresh start. A person filing Chapter 7 needs to sell any of his/her/their non-exempt property and the proceeds go to the entity’s creditors. Because of the forced sale of non-exempt property, many people who file this type of bankruptcy do not have many or any assets to sell and therefore can get through this process relatively quickly (months).
This is the most common type of bankruptcy partly because a person can relive himself/herself of many debts as opposed to having to repay them.
You may have heard of the terms “liquidation bankruptcy” or “straight bankruptcy“. These are other ways to refer to Chapter 7.
When determining what form you want to file, it is important to consult a bankruptcy attorney like Brad Duvall. He can evaluate your situation and advise you on the pros and cons of each type of bankruptcy.
Even though many debts are relieved with this type of bankruptcy, for items like car loans or mortgages, the debtor can enter into a reaffirmation agreement with specific creditors to hold on to certain important assets.
Lastly, anyone who completes Chapters 7 or 13, cannot file again for eight years.
You can also see “what is banckruptcy“.
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