Filing for bankruptcy is a means for individuals who are struggling with critical financial difficulties – this can alleviate the burden of debt; however, it has a really negative connotation in society. Businesses and companies do not like it, but for consumers, it provides a way to start over.
Let’s begin by researching the various kinds of bankruptcies. There are three filings you are able to get: Chapter 7, Chapter 11, and Chapter 13.
Chapter 7 bankruptcy, which occasionally is called a straight bankruptcy – this a liquidation legal proceeding. The debtor will hand over all assessable property to the bankruptcy trustee who then exchanges this for money to administer to the creditors.
The debtor then obtains a discharge of all debts generally within four months. In a large majority of cases the debtor usually has no property or assets that he would lose so Chapter 7 will afford that individual a “clean slate”.
Among the reasons of Bankruptcy Law is to afford a individual, who’s hopelessly weighed down with debt, a new beginning by annihilating their debts.
New legislation has been passed regarding Chapter 7 bankruptcies. In essence what the current laws require of people who are filing a Chapter 7 bankruptcy is twofold:
- The person has to attend an approved credit counseling class within six months before filing.
- This person also has to attend and finish an approved financial management course prior to any debts can be discharged.
Although those conditions are required, it is still a comparatively simple process to file for a Chapter 7 bankruptcy. Of course, there are governmental expectations that are required which is a good reason for hiring a bankruptcy attorney. Still, it is feasible for you to do this yourself, just make sure that you diligent in your research.
Here are some basic reasons given for filing a Chapter 7 bankruptcy:
- Medical bills
- Overextended credit
- Large, unexpected expense
If you ever find yourself needing to file for a Chapter 7 bankruptcy, you could be concerned about whether you will be able to hold on to any of the things that are significant to you and important to your life. Such as keeping your car and your house. This is when you need to hire a lawyer bankruptcy san diego. Being in this kind of situation is certainly frustrating. Hence, it is recommended to hire a professional who has the knowledge and expertise in guiding and supporting you all throughout the process of bankruptcy.
Unsecured debts, such as credit card debt, personal loans and some taxes are cancelled out in a Chapter 7. Nevertheless, some debts are not dischargeable under Chapter 7 bankruptcy; these debts may include, most student loans, alimony and child or additional court ordered support payments.
If a debt happens to be secured by property, such as a home mortgage or an automobile loan, then you can choose how to address that debt. For instance, in the matter of a car, you may:
- Keep the automobile and the debt but you need to keep up your payments.
- Pay off the vehicle at its current “fair market value”
- Return the vehicle, include any balance due in your bankruptcy and pay nothing further on the vehicle.
In a large percentage of Chapter 7 cases, the individual is able to keep all of their property. Bankruptcy law is not intended to penalize you and most likely will permit you to keep your property.