Bankruptcy Chapter 7: Five Things You Need to Know

A bankruptcy filing is a debt relief option that can help you avoid harassment from any collector. Generally, it can allow a bankrupt individual to repay creditors and financially have a fresh start. In principle, you pay-back what you owe and wipe-out unpaid debts. Bankruptcy laws, however, can be quite complicated.  This is why legal help, especially for the paperwork, is necessary when filing bankruptcy.

A bankruptcy attorney can help you with how to file and provide you information on the different types of bankruptcy. Read on to learn more about bankruptcy filings. Below are five things you should know about a particular bankruptcy process: filing chapter 7.

1 . You will (likely) keep most of your possessions

Filing for bankruptcy does not always mean that the debtor loses assets. A bankruptcy lawyer will be able to explain ‘exemptions’ to you, and how a creditor will likely not go after nonexempt possessions because of a loan or lien. (In contrast, under Chapter 13, assets are kept but their value is considered in the repayment plan.)

2. Some forms of debt will not be relieved

In bankruptcy cases, you generally cannot discharge child support, recent taxes, student loans, and debts from fraud you committed. Generally, only personal loans, medical bills, and credit card debts are often discharged.

3. Paying off debts may not be the best option for some

 Without consulting bankruptcy lawyers, you might think that simple debt-settlement is still the best path to take. Pay-off what you owed from your lender and that’s it. Filing for bankruptcy is indeed a difficult decision, as it will affect your credit score and finances in general. However, if debts exceed half of your annual income and you can’t pay-to-be-debt-free in the next five years, declaring bankruptcy is likely your best choice.

By getting the best bankruptcy attorneys, you can enjoy bankruptcy protection and avoid foreclosure.

4. Filing for bankruptcy does not imply failure

Often, bankruptcies are filed by wage-earners who make less than what they need. They are caused by several reasons and do not always indicate poor management and not being able to take control of your finances.

If you filed bankruptcy, or are planning to file for bankruptcy, you should consider yourself brave.

5. You financial future is not automatically ruined after you declare bankruptcy

Although your bankruptcy will remain on your credit report and interest rates will be higher for several years, your credit score will slowly increase months after you file for bankruptcy. You can also try to restore credit by getting a secured credit card and a professional from a trusted law-firm can help explain this to you in more detail.

Are your considering bankruptcy to get yourself out of debt? Seek advice from legal professionals knowledgeable about bankruptcy law and the bankruptcy code. If you need to know how to file bankruptcy in Illinois, what an exemption or automatic stay is, or what happens after bankruptcy, contact Cutler & Associates, LTD.