Chapter 7 Bankruptcy
Bankruptcy is often portrayed in a negative light because of what comes to mind when we hear going bankrupt. The term bankrupt is often associated with high debt, being broke and having no money for basic bills. Bankruptcy is a positive option when you’ve suffered a hardship and are now dealing with unmanageable debt. The events leading up to bankruptcy are very important; if you lost your job and are failing to make ends meet for you and your family, bankruptcy might be a good option. If you’ve spent too much money because you’re irresponsible with your finances, you’d be better off with a strong budgeting plan before you consider declaring bankruptcy. Because every bankruptcy case is different, the most important thing to remember is that people’s opinions don’t matter when it comes to doing what is right for you and family. Before making any rash decisions, we encourage all individuals considering bankruptcy to seek the advice of an experienced bankruptcy attorney.
Declaring Bankruptcy
People declare bankruptcy for all sorts of reasons. One of the most common factors influencing a person’s decision is that they feel as though they have no other means to pay down their debts and get back on track financially. Regardless of why you went bankrupt, when you actually file for bankruptcy, it is nothing more than an admittance that you are overburdened with finances and are proactively looking for a debt solution. It’s important that you file for bankruptcy in a way that will protect your assets and yourself because many people don’t realize that making a mistake in bankruptcy court can get your cased dismissed allowing your creditors to come after you for all of the debts you owe.
The main benefit of a Chapter 7 Bankruptcy is that you would be given a fresh start. As a debtor in Chapter 7, you are no longer held responsible for repaying debts after they are discharged. Another great perk of the Chapter 7 bankruptcy is that, unlike a Chapter 13, there is no limitation on the amount of debt you can include in the bankruptcy estate. Many people choose to file a chapter 7 bankruptcy when there is no way for them to get out of debt.
Filing for Bankruptcy is a serious decision. While there are many perks to both types of bankruptcies, it is important that you learn how to protect yourself when filing a bankruptcy. Making a mistake when filing a bankruptcy in the bankruptcy court can be a financial nightmare. Additionally, some debts are not eligible to be discharged through either bankruptcy. For more information, take a look at my blog entry about when to file and when not to file for a bankruptcy.