Basics of Chapter 7 Bankruptcy

Are you planning to file chapter 7 bankruptcy? Therefore you need to have proper knowledge on the bankruptcy procedure of chapter 7. On filing under this chapter your non exempt property would be sold out to repay your creditors.

You need to go to the local bankruptcy court in order to file your petition for bankruptcy. You need to make a list of your owed amount and valuable property. If you decide to file chapter 7 bankruptcy make sure that the information you provide would be authentic. Otherwise you petition might not be approved on the basis of misguiding the court.

An “automatic stay” is put into effect after filing the petition. As the stay is put to place this prohibits the creditors from collection of debt from the debtor. The “automatic stay” will be lifted if the creditor persuades the judge stating that the stay order would have an impact on them. Debtor’s non exempt property would be assessed by the trustee appointed by the court as per the Bankruptcy Code. After the sale of the property the fund would be distributed among the creditors.

What the pros of Chapter 7 Bankruptcy?

Chapter 7 can be an effective solution for people who are financially strapped and require safeguarding themselves from the creditor harassment. The judge will put an “automatic stay” that will prevent the creditors from collection after declaring bankruptcy. Chapter 7 bankruptcy will help you eradicate your piling debt issues and give some time to settle.

Look a professional help: Hiring a lawyer helps to deal with the bankruptcy proceeding with ease if you are unaware of the filing process. The debtor would be liberated from the clutches of the creditors while hiring a lawyer. In order to pave a smooth way out of the labyrinth of debt it is advised to hire an attorney. But the debtor needs to evaluate the lawyer so that he finds an expert to get fruitful advice.

What are the exemptions that are offered under Chapter 7?

If you file under chapter 7 bankruptcy then you are liable to keep the following things like alimony amount, child support. You can save your home from repossession if the equity is below $ 17, 425. Jewelry and clothes along with the unemployment insurance are excused from bankruptcy procedure.

These exemptions are offered by the Federal Law for the benefit of the consumers. The assets of the debtors are prohibited from liquidation with the help of the exemptions under chapter 7 bankruptcy.

After their debts are eliminated under chapter 7 bankruptcy people often have a tendency to return to their flamboyant lifestyle. Therefore in order to manage your spending spree you need to plan a budget. If you fail to control your expenditure then you might get back to such similar situation again. Thus it would depend on your financial situation and temperament whether filing bankruptcy would be the right option for you or not. Choose the right option so that you can protect yourself from the torment of debt.

This article is contributed by BG, an IAPDA Certified Debt Arbitrator working with Oak View Law Group. Besides,he advices deliberately on debt management.