Many people want to explore the option of filing bankruptcy when they cannot stay afloat with their finances. However, a lack of information about the process often makes people shy away from it. If you have been reading about debt resolution options, the chances are that you are already experiencing financial hard times. The following questions can help you understand filing for Chapter 7.
Do You Qualify?
Chapter 7 exempts you from having to pay most types of credit. It is the ideal way to reorganize your financial life when you are deep in debt and cannot meet your monetary obligations. When you follow the recommended steps and your petition is successful, the courts scrap most of your debt. You also get financial literacy classes which help you avoid the same situation in the future.
Which Debts Can You Eliminate?
If you file Chapter 7, your debts as a business owner will not get discharged the same way they would be if you filed Chapter 13. However, this does not mean the entire process will not have benefits. To start with, you will get the automatic stay that prevents the people you owe money from coming after personal assets. Chapter 7 means that anyone planning to take you to court will not have the chance to collect or reclaim your valuables. The automatic stay also eliminates the stress of dealing with insolvency-related lawsuits.
Does It Stop collectors?
When you file the petition, a stay goes into effect. It means that anyone that is in the process of taking legal action against you cannot proceed. It also means the creditors cannot send debt collectors to repossess your valuables. Creditors will need a court order to collect from you immediately after the stay becomes active. However, the courts will leave the systems available to collect debts such as child support.
How Will a Trustee Help?
Someone must oversee the financial restructuring process and ensure creditors get back their money. The expert will liquidate all your non-exempted assets and use them to pay the debts. If you do not have assets, they will indicate that there is nothing to distribute.
Filing bankruptcy is simple when you engage a competent lawyer. They will help you get the needed documents, fill them out and follow the rest of the process to a conclusion. It is the best way to restructure your life and return to solvency. For more information on Chapter 7 bankruptcy, contact a professional near you.
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