Timeline for Chapter 7 Bankruptcy

Bankruptcy is the term used when you legally declare that you can no longer repay your debts. Individuals therefore have the choice of either declaring chapter 7 or chapter 13 bankruptcies, depending on the severities of their debts and the incomes which are being made. Of most, chapter 7 bankruptcy will make the most sense, although you should consider both carefully and do what is right for yourself. Nevertheless, if you do declare chapter 7 bankruptcy, here is how it will play out:

Firstly, your declaration will officially begin when you sign the paperwork and file the proper documents with a bankruptcy court. In most states, you will have to finish a counseling course regarding bankruptcy so that you can be sure this is the correct option for you. This can be carried out for no longer than six months before you decide to file your paperwork. Upon filing, your wages will no longer be garnished and your creditors can no longer proceed with legal actions against you or, in most cases, even call you regarding your debt. The court will later on contact your creditors.

Next, you must try to meet with your creditors in what is called the 341 meeting. Creditors may or may not choose to attend, but you must be there. A trustee will be assigned to your case and will presides. This meeting will typically only last for five minutes, and creditors usually do not show up. Following this, your trustee will sell any of your possessions that are nonexempt. Creditors have up to 90 days to then file claims. A bankruptcy lawyer will be assigned to you in order to help you through this process.

After the 90 days are finally over, or after all of your creditor have files, their claims (whichever comes first), will be discharged and all of your debts will be written off, except with certain exceptions, such as student loans and child support payments. Other debts that cannot be wiped clean from your slate will include alimony obligations and taxes.

Try to always be well aware that most of your possessions can be sold when you file for bankruptcy and will be sold rather quickly. In most cases, it is usually more profitable to sell them yourself for the possibility of more money before you declare bankruptcy and use them in order to help pay off your debts. If you can do this effectively, you might not have to declare bankruptcy at all. If you can, then try to look for options in order to avoid bankruptcy. You have choices, and debt counselors can help you to figure out a financial plan that will be right for you.

Article Source: http://www.debtfinancearticles.com.

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