How Chapter 7
Bankruptcy Works
First,
you will have to file for Chapter 7 bankruptcy. This is a process
that tells the courts that you intend to declare bankruptcy. After going
through the initial filing, the court places a temporary stay on your current
debts. Creditors are prevented from collecting payments, garnishing your wages,
foreclosing your home or evicting you, turning off utilities, and repossessing
property. The court takes legal possession of your property and appoints a bankruptcy
trustee to your case.
The
bankruptcy trustee will then look over your finances and assets. At this time,
they will sell your nonexempt property and use the proceeds to pay off as much
of your outstanding debt as possible. The trustee will also arrange a creditor
meeting, which means you will go to the courthouse to meet your creditors and
answer questions about your filing.
Completing
Chapter 7 bankruptcy can take
between four and six months. At the end of the process, the court will
discharge your remaining debts, meaning you won’t have to pay for them anymore.
However, certain types of debt will remain, and that can include child support,
alimony, court fees, tax debt, and most student loans.
Get Assistance from a
Bankruptcy Lawyer
Going
through Chapter 7 bankruptcy can
be a long and intimidating process. If it is your first-time filing, you may be
confronted with options and terms that may be unfamiliar to you, such as the
differences between exempt and nonexempt property--and how they might affect
you.
However,
you don’t have to go through the process alone. Having an experienced bankruptcy lawyer at your side can help
you in choosing the best possible path forward. Request a consultation with a
lawyer to explore your options.
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