Chapter 7 Bankruptcy in the Real World

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Bankruptcy is no respecter of persons. Unexpected medical bills, maxed out credit cards with massive interest, adjustable rate mortgages, or a myriad of other unplanned expenses, and it is necessary to consider filing for debt relief. For many people, to file chapter 7 bankruptcy is the only way to ease the financial pressures and get a fresh start.

Answer the Phone. Creditors are Calling

Overwhelming debt generally translates into harassing phone calls, a bad credit rating, and dreaded mail. Turning the ringer off does not help. The mailbox is full of nasty letters demanding money that is not available. However, after filing chapter 7 bankruptcy, the court puts a stay on lawsuits, foreclosures, repossessions, and any other creditor harassment. Until the court completes the bankruptcy process, the debts are basically frozen, until the court determines whether the debts should be permanently expunged. In the meantime, answering the phone is no longer a dreaded proposition.

Is it Really a Fresh Start?

Chapter 7 bankruptcy is also known as the fresh start bankruptcy. For qualifying individuals, unsecured debts are discharged as if they never existed. Many secured debts are also forgiven, but the debtor will likely give up the property or possession. If payments like the house and car are current, it is possible to retain these assets.

However, the first step is to determine eligibility for filing under chapter 7 bankruptcy. Debtors are required to attend consumer credit counseling. In addition, a means test is given, in order to verify that the income to debt ratio makes it impossible to pay all of the bills and still provide for the basic necessities of living. If so, it is only a matter of time before debtors have a fresh start and the chance to build a better financial future.

Unique Financial Issues

Thousands of people file chapter 7 bankruptcy every year. However, each case is different. The services of a qualified bankruptcy attorney are essential. A lawyer discusses all financial options, the potential for property retention, what debts will be discharged, and what expenses are exempt from bankruptcy.

Not everyone reaches the point of bankruptcy by the same route. For some, it is simply a series of poor financial decisions. However, the majority of debtors seek relief because of:

  • A job loss
  • Wage reduction
  • A divorce
  • Unexpected medical bills
  • Irresolvable credit card debts
  • A death in the family
  • A family disaster
  • A natural disaster

The reasons are unique for every individual considering debt relief options. But, the need for a fresh start is equally important.

Professional Assistance and Legal Advice

Filing for bankruptcy is a trying proposition. Although debt harassment halts once the case is filed, the entire process will take a few months. Going to court without a lawyer is not recommended. Chapter 7 lawyerss know all of the state bankruptcy laws, exempt assets, court procedures, legal questions and answers, and what to expect with a fresh start. All of the proper documents will be filed with the court-on time. In addition, the moral support is invaluable, when the chips are down.

So, when a pile of debt seems insurmountable, and the financial pressures are adversely affecting every area of life, it is time to consider chapter 7 bankruptcy. Then, a fresh start is just around the corner.