Filing Chapter 7 Bankruptcy

If you are going to have to file for bankruptcy, you might be, or forced to be, filing under the Chapter 7 clauses. If you are a business, this will imply that the business is going to be ceasing operations and having a Chapter 7 Trustee appointed straight away, who will sell all of the assets and distribute the money to the creditors. It might or might not mean that the people who work for you will lose their jobs. At times, when a company is sold off, it will be kept intact or partially intact, and the business might then proceed as usual, simply with a different person in charge of it.

Chapter 7 can also otherwise be filed by an individual. This is going to mean that you can keep certain property that is exempt. Nevertheless, some liens, such as real estate mortgages, are going to be kept intact. Any assets that are not exempt are going to be sold off by the trustee in order to pay back the creditors. This is going to imply that the other types of unsecured debts that you have might be canceled. Even though most other types of unsecured debt are canceled, there are some that you are still going to have to be responsible for. This will include child support, most taxes, most student loans and any fines or restitutions that you are responsible for, regarding any crime that you might have committed.

If you file for bankruptcy, you are going to be able to start again afresh because most of your debts will have then been canceled. Obviously, anything that you have of any value will have been already sold, so you are going to have to start over when it comes to that also. Another disadvantage is that you are going to have a record of the bankruptcy on your credit report for the following 10 years. It might mean that you aren’t able to obtain loans or any other types of credit, but this effect could also occur just as easily with high debts.

There are some things that you should consider before filing for Chapter 7. There are some cases in which you can avoid being forced to file on the grounds that it might be abusive. You might be able to opt for Chapter 13 instead, which means that you will be able to pay off all or some of your debts if you have more time, and if this happens you won’t have to have your property and assets sold off.

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

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