Chapter 7 bankruptcy is one type of bankruptcy that is available for people to file under the Bankruptcy Code. This form of bankruptcy is not available to everyone. Only certain people can file this type of bankruptcy and only people in certain situations should someone file this type of bankruptcy.

Who Can File Chapter 7 Bankruptcy?

No everyone can file for Chapter 7 bankruptcy. It is only available to individuals and also businesses. If you want to file for Chapter 7, assets should be limited to those that can be claimed as exempt.

Usually, filing for Chapter 7 may be best of one has a lot of assets. However, the decision on whether you are able to file for Chapter 7 is up to the court.

Process of a Chapter 7 Bankruptcy

The process of filing a Chapter 7 bankruptcy starts with collecting all the information about your debts and your financial situation. You will be required to meet with a counselor and attend counseling that will help you to decide if filing bankruptcy is the best option.

After going thought this first phase, you will then be able to start filing out the proper forms and filing them with the court. After this, you are required to attend court to plead your case. This will be done over the next few months.

The whole process can last quite some time, but during the process you are protected from debt collection by creditors.

What are the Risks?

Bankruptcy is not a simple solution when you do not want to pay your debts. In fact, recent changes in the bankruptcy laws has made filing bankruptcy more difficult and in some cases impossible.

Filing for bankruptcy has quite a number of negative effects. Firstly, you can lose your assets. Other than that you will have a damaged credit record. This is especially bad as it may be difficult for you to get loans and credits in future.

However, according to new laws, you may be able to file for Chapter 13 instead of Chapter 7. This can be done if your income is deemed to be more than the set amount. The court will then decide how you can pay back the amount you owe.

Now its time to put the knowledge to the test! You should always remember that bankruptcy is not an easy way out. And if you are serious about filing for Chapter 7, you need to be prepared for the consequences.

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