You will want to know how Chapter 7 bankruptcy works to eliminate debts. Bankruptcy cases are filed by people who are drowning in debt. About 1.4 million bankruptcy cases have been filed on average each year over the last 10 years. In 2010, a little less than 1.6 million cases were filed. If you are thinking about bankruptcy, you are not alone.
Most cases are filed to discharge credit card debts, medical bills and unsecured credit lines or to stop a foreclosure sale or auto repossession. Even income taxes can be discharged under certain circumstances. Most people make financial obligations they are able to afford at the time they incur them. Later on, sometimes years afterwards, unforeseen circumstances can make debt repayment an extreme hardship if not an impossibility.
Most individuals (that’s “humans” in bankruptcy talk) seek relief under one of the two predominant kinds of bankruptcy cases—CHAPTER 7 and CHAPTER 13. Here we will take a look at how CHAPTER 7 works.
When appropriate, Chapter 7 bankruptcy allows a person to be legally excused from repaying most types of debts and to keep certain assets/property called EXEMPT property.
Below are the topics that will bring Chapter 7 bankruptcy all together for you. It will be a quick read. When you are done, you are going to have a good grasp of Chapter 7 bankruptcy. You will understand the basic fundamentals.
Before you dive in, here are some questions that you should be asking:
- What debts will Chapter 7 bankruptcy discharge?
- Will any of my assets be taken away?
- Can I still pay some of my debts?
- Which debts should I pay? Which debts should I walk away from?
- Am I eligible to file?