Filing for Chapter 7 Bankruptcy

Posted by on Sep 20, 2017 in Bankruptcy

If you are considering filing for chapter 7 bankruptcy, there are a few important questions you may ask yourself. Do I qualify for chapter 7 relief? How would this filing affect my home or other personal property? Is filing chapter 7 going to affect my credit, now or in the future?

A debtor that files Chapter 7 may be an individual, partnership, corporation or other business entity. However, it is important to check with a bankruptcy attorney, as a Chapter 7 discharge is available to individual debtors, not to partnerships or corporations. A chapter 7 filing for a business is designed to liquidate company assets and pay its obligations.

The purpose of filing for a Chapter 7 would be to give an individual a fresh start, as the debtor would have no liability for most debts, once they are discharged. However, there are some debts that are not dischargeable in Chapter 7. Certain taxes, debts for alimony and child support and student loan debt, among others, may not be able to be discharged in Chapter 7.

An important note is that any filing under Chapter 7 may result in some property loss. Yet, the debtor may be able to file a schedule in Chapter 7 that would exempt some personal property. A bankruptcy attorney in your state can assist in helping the debtor to retain important property and to receive a discharge that covers most of the debtor’s allowed debts.

In a chapter 7 filing, the debtor will need to provide a listing of creditors, personal property and a listing of all monthly expenses. Additionally, the debtor releases all creditor’s names and addresses to his/her attorney. Then the bankruptcy court would give notice of the bankruptcy filing to these creditors. Typically, there is an ‘automatic stay’ that stops most collection action against the debtor or the debtor’s property. Under this automatic stay, creditors typically cannot initiate or continue a lawsuit, garnish wages, or make phone calls that request payment to the creditor.

Filing for Chapter 7 bankruptcy can affect your credit, and can stay on your credit report for up to 10 years. However, not filing when is necessary, may cause negative marks as well on your credit report, due to late or missed payments to your creditors. In Chapter 7, you will also lose your credit cards, but you can get new lines of credit within one to three years of filing for bankruptcy, but sometimes with a higher interest rate. So, it is important to decide what is best for your situation.

However, if you file now for Chapter 7, and you have a certain amount of disposable income, the bankruptcy court can convert your case to a Chapter 13, where you pay back debts over several years. This action may improve your financial situation as you are paying off some debts and converting could be more favorable to your credit. Check with a bankruptcy attorney in your area for more details on filing for Chapter 7.

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When Should You File For Bankruptcy?

Posted by on Apr 19, 2016 in Bankruptcy

When managing a business, there comes a point in time when you need to make a decision to finally throw in the towel. One of the hazards in business management is running out of capital to sustain your business. Aside from the capital, there are other financial issues that you need to address such as the taxes, operational expenses, employee salaries, and others. All this can lead you to finally decide to throw in the towel and file for bankruptcy. But is it really the right time to declare bankruptcy?

There are many potential issues that will place your business in jeopardy and incur unbearable debt. In this article, we will help you decide when to finally declare your business as bankrupt.

1. Assess Your Situation

Bankruptcy has a significant and long term effect on your business that you need to give it a careful thought first. Is there really no other way to save your business than bankruptcy? Before finally giving up, see if you can still salvage whatever is left of your business. Can your funds still sustain your business? Are you burdened with too much debt? It is important to determine your financial position first before deciding to go bankrupt.

2. Is your situation temporary?

Before filing for bankruptcy, you may want to delay it for at least a few more months and see if your situation will improve. For instance, if you have recently lost income due to a lost job, see if you will qualify to avail of unemployment benefits.

3. Are you willing to take the risk?

When filing for bankruptcy, there is no turning back on your part. If within the period you applied for, you suddenly get money or land a high paying job, you cannot have your bankruptcy history removed from your record right away. You will have to wait until the expiration of the plan before getting another debt.

4. Is it really the best option?

Before filing for bankruptcy, you need to ask yourself if it is really the best option. You need to weigh the pros and cons to know if it is really the best option. If it is, then go ahead and declare your bankruptcy.

Proceeding with the Bankruptcy

If you decided that bankruptcy is indeed the best option, there are two ways you can go about with the declaration. The most common route is voluntary filing. The second way is to have the court order your bankruptcy.

Bankruptcy is a huge financial step that requires careful thought on your part. Look out for other alternatives first before taking it into consideration. To learn more about bankruptcy, click here.

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