Understanding Chapter 7 Bankruptcy

While there are a couple of different types of bankruptcy, Chapter 7 is the most commonly filed. In fact, Chapter 7 accounts for up to 65% of all of the bankruptcy filings. As long as there are no objections from any of the parties involved in the bankruptcy the case could be discharged within just a few short months after the attorney files the bankruptcy petition.

For those who do not want to be left without a car or a home to live in, a reaffirmation agreement can be signed. This will allow the debtor to keep the car and the house, as long as it can be proven to the courts that it can be afforded with the current income in the residence. Many times, this means that if the debtor ends up defaulting on the car or the home shortly thereafter, he or she is still protected by the bankruptcy law. The car or house can be taken and those companies would follow suit with all of the other debts that were discharged.

It is important to realize that filing a Chapter 7 Bankruptcy will appear on your credit report. This filing could affect your ability to obtain new credit, rent an apartment, or gain new employment. This is not to say that doing such things would be impossible but you have to be aware that there will be some bumps in the road because of the bankruptcy filing. The Chapter 7 filing will stay on the credit report for up to ten years. While you cannot file another Chapter 7 bankruptcy during that time, you could quality for a different bankruptcy chapter if you found yourself in financial trouble a few years after filing the Chapter 7.

For those that are interested in learning whether or not Chapter 7 is for them, a consultation with an attorney should be scheduled. Bankruptcy attorneys who specialize in the federal bankruptcy law will need to know your income, the amount of debt you have and the kind of debt that it is, and what your intentions are with any property that you own. You may be informed that certain debts cannot be waived under the Bankruptcy law such as child support, taxes, and certain types of student loans.

The sooner you set up your consultation the sooner you will have a fresh start. With the new found freedom that comes with the discharge of a Chapter 7 Bankruptcy you will be able to put your life back together and prepare for the future. There are steps that can be made in rebuilding credit after bankruptcy.

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