Chapter 7 Bankruptcy Information

If you are in deep dept, you might have to consider chapter 7 bankruptcy. However, going with bankruptcy is a serious decision that will have a severe impact on your life for a long time. Before making the commitment to file personal bankruptcy, there are a number of things you should know about so you can make the right decision. We have made an effort to provide comprehensive and current chapter 7 bankruptcy information to help you decide whether it is the right choice for your situation, and what are your other options.

What Is Chapter 7 Bankruptcy?

Chapter 7 bankruptcy is a form of debt relief that allows you to eliminate your debts by means of a court-supervised liquidation of your assets. Whatever proceeds come out of this liquidation process will be used to pay off your creditors in order of their priority as defined by personal bankruptcy law. Usually, if any debt remains after this process, it is discharged by the bankruptcy judge. It is essential to understand that the law, not you, decides whether you may go for chapter 7 personal bankruptcy.

Is it Right For You?

In Chapter 7 bankruptcy the majority of your assets are liquidated to satisfy part or all of the debts you owe. There are exemptions to the assets that can be seized, but these exemptions are extremely limited; therefore, Chapter 7 is the preferred type of personal bankruptcy when you own no assets of immense value, such as a home, that you cannot afford to lose. Since it is the closest thing to a fresh start, however, many people choose it as a viable option when their debt load becomes too heavy to carry.

You will have to evaluate your own situation very carefully to determine whether a Chapter 7 bankruptcy filing is right for you. Some questions for you to ask yourself include:

♦ Is most of your debt unsecured debt, such as credit card or medical bills?
♦ Is your monthly income below the median level for a household of your size?
♦ Are you currently renting an apartment, instead of owning a home?
♦ Do you have assets that could be exempt under Chapter 7 bankruptcy law?
♦ Does a short settlement time, approximately three to six months, appeal to you?

If you answered yes to all of the above questions, chapter 7 personal bankruptcy could be the ideal solution for you. However, it is always advisable to consult an experienced bankruptcy attorney before making the final decision.

Should You Hire an Attorney?

It is absolutely imperative to hire an attorney prior to wading into the sheaf of paperwork awaiting you once you file bankruptcy. Your attorney can advise you on assets that may be exempt under law, and can help you collect the relevant and necessary paperwork for a proper and complete chapter 7 personal bankruptcy filing. Once the documents have been collected, your attorney will help you complete the forms in a complete and thorough manner; this is crucial, as often courts will throw out a Chapter 7 bankruptcy petition that has been incorrectly filed, and you may be at risk of a perjury charge if you fill out your petition with incorrect information.