Ultimately a Chapter 7 bankruptcy provides you relief from nearly all, if not all, of your debt. It provides you a way to start over with your finances.
The laws and regulations governing Chapter 7 bankruptcy have changed extensively over the past few years. But, the purpose hasn’t changed. It exists to assist people who find themselves in a financial situation where they have an overwhelming amount of debt with no likelihood of ever being able to entirely pay that debt off.
To start a bankruptcy, you have to file a bankruptcy petition in Federal bankruptcy court. It’s highly recommended that you use an attorney to handle this filing for you. Once your lawyer files your bankruptcy petition, you get immediate protection from any action by your debt collectors. That protection is termed an “automatic stay.” In essence, the automatic stay of bankruptcy stops all collection action by your debt collectors. In truth, as soon as you file your bankruptcy petition, your debt collectors are prohibited by federal law from contacting you for payment or from filing any sort of collection proceedings against you.
As part of your bankruptcy proceeding, you’ll have to go to a hearing at bankruptcy court. This hearing ordinarily takes place in a room with you, the bankruptcy trustee (i.e., the person assigned by the court to oversee your case) and your attorney. The entire process usually only takes about 15 minutes, in the course of which the trustee will ask you a number of questions regarding your take-home pay and your debts. At the end of the hearing, the trustee makes a recommendation to the bankruptcy court to discharge your debt. A discharge order is then mailed to you. It might take some months for you to actually receive your discharge order.
Be aware that your creditors might appear at your hearing to speak for their benefit and oppose your bankruptcy discharge. However, it is really an exceptional situation where a creditor actually shows up. In most cases, the bankruptcy is fairly easily completed without any protests from lenders.
Bankruptcy may well be your only out if you’re burdened beneath a sizeable sum of debt that you have no means to pay back. Therefore, if you are in debt way over your head and are having difficulty making normal payments, you owe it to yourself to at least seek the advice of a bankruptcy lawyer concerning the prospect of filing a Chapter 7 bankruptcy.
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Tags: Bankruptcy, chapter 7 bankruptcy, Debt, Debt Consolidation, Debt Elimination, finance