Chapter 7 Bankruptcy
Bankruptcy can be a good way to wipe away most debt and have a clean slate. It’s what many people use when they have too much debt and need to remove it in some way. Although it’s not for everyone, and the consequences may be wide-reaching, it can be an effective way to help with overwhelming and crushing debt.
However, when you start to look into bankruptcy, it might surprise you to find that there are multiple types of bankruptcy. Chapter 7 bankruptcy is just one of the types you might file for. Learning more about it can be helpful on all sides.
What Is a Chapter 7 Bankruptcy?
The first thing to learn about is what a Chapter 7 bankruptcy is in the first place. This is one of the most common types of bankruptcy claims, with the other being Chapter 13, which allows for a payment plan process. In Chapter 7 bankruptcy, all debts are effectively wiped away, but in return, the debtor has to agree that a bankruptcy trustee will be allowed to gather and sell most of their assets. There are also other requirements, as well as both benefits and drawbacks to Chapter 7 bankruptcy.
How Does a Chapter 7 Bankruptcy Differ From Other Forms of Bankruptcy?
The two most common forms of bankruptcy are Chapter 7 bankruptcy and Chapter 13 bankruptcy. Chapter 13 bankruptcy does not require that the debtor liquidate all their assets, but instead, it requires that they commit to a new type of payment plan for the debts they already have. These payment plans can be precarious, however, and not everyone can stick to them. For some people, a Chapter 7 bankruptcy is simply the best option.
When Might Chapter 7 Bankruptcy Work Best for Someone’s Needs?
There are many reasons that a Chapter 7 bankruptcy might be the right reason for a specific individual. These are a few of the situations that may cause a Chapter 7 bankruptcy to be the right option for a person:
- If a person’s income is too low to make Chapter 13 bankruptcy viable.
- If a person has unexpectedly received debts that they can’t pay off, like unexpected medical debts.
- If a person wants to be over and done with their debts as quickly as possible, even with a higher potential cost.
Of course, at the end of the day, it’s crucial that anyone considering bankruptcy talks to their attorney about the benefits and drawbacks of bankruptcy. Only a legal expert can help you decide whether bankruptcy is a good option. However, it is true that for many people, this is the best option for moving forward.
How Can Enformion Help With Chapter 7 Bankruptcy?
When someone files for Chapter 7 bankruptcy, they need to notify all of their creditors of the fact that they’re filing. Creditors also may want to check to make sure the person has reported all of their assets appropriately. For either of these things, it’s possible to get immense amounts of help through Enformion. You can find lots of contact information and get more help with your bankruptcy needs in general on either side.