Wednesday, July 18, 2007
Can I File Chapter 7 Bankruptcy?Sometimes filing bankruptcy seems like the only viable solution to rid yourself of the mounting debt you've accrued during the last several years. There are several types of bankruptcy options, but only a certain one or two will be applicable to your financial situation. Chapter 7 bankruptcy is one of the more common types of bankruptcy filed.
Chapter 7 bankruptcy, often called liquidation bankruptcy, cancels your debts, but you may have to let the bankruptcy court sell (liquidate) some of your property for the benefit of your creditors. Chapter 7 refers to the chapter of the federal Bankruptcy Code that contains the bankruptcy law. The whole Chapter 7 process takes about four to six months, costs around $300 (some hire a lawyer and it costs more), and usually requires only one court appearance.
Due to the difficult and intricate nature of bankruptcy law, it is highly recommended that you hire a trained bankruptcy attorney to handle this very serious financial and legal undertaking.
You cannot file Chapter 7 if you already received a bankruptcy discharge in the last six to eight years, or if, based on your income, expenses and debt burden, you could complete a Chapter 13 repayment plan. A Chapter 13 bankruptcy is also called a wage earner's plan. It enables people with regular income to develop a plan to repay all or part of their debts. Under this plan, debtors propose a payment plan to make installments to creditors over three to five years.
To file for bankruptcy, you will fill out a petition and a number of other forms and file them with the bankruptcy court or in your area (if you hire an attorney, he/she will assist you with these forms and file them for you). The forms require some basic information including what property you own; income; debts; property you claim the law allows you to keep through the bankruptcy process (clothing, furniture, etc.); property you owned and money you spent in the last two years; and property you sold or gave away in the last two years.
We have all heard horror stories about how filing bankruptcy will ruin your financial life for at least seven years. Finding and hiring a trained bankruptcy lawyer in your area will certainly help minimize the stress of the whole bankruptcy process, and he/she can advise you on how to recuperate from such a drastic financial measure.