Choosing to file for bankruptcy can be a very hard decision, but in the long run it can reduce your stress and give you a fresh slate. Common reasons to file for bankruptcy include job loss, large medical debts, or excessive credit card debt that you can no longer afford to pay. While it is possible to file for bankruptcy on your own, it is highly recommended that you retain the services of a bankruptcy attorney to assist you. The most common type of bankruptcy is chapter 7 bankruptcy, which involves liquidating non-exempt assets to pay off creditors. Even if you do not have enough assets to clear all of your debts, your debts will be eliminated with chapter 7 bankruptcy. Continue reading to learn more about what to expect when filing chapter 7.
Filing a Bankruptcy Petition
The first step in getting your chapter 7 bankruptcy started involves filing a bankruptcy petition. Your attorney can assist you with gathering all of the documentation you need and will also guide you through filling out the petition to make sure that everything is correct. A bankruptcy petition is basically documentation that is filed with the court and states that you would like to file for chapter 7 bankruptcy.
Letting Your Creditors Know About Bankruptcy
After your bankruptcy has officially been filed, all of your creditors will be notified that you have filed for bankruptcy and know that you're going through the legal process within the bankruptcy court system. It is important to note that after creditors are notified that an individual has filed for chapter 7 bankruptcy, they are no longer allowed to contact an individual to try to collect a debt, nor can they place any liens against a person's property. If you have one or more creditors still trying to collect debts from you after you have filed for bankruptcy, let you attorney know and he or she will take care of the issue.
Assessment of Assets
A trustee will be appointed to your chapter 7 bankruptcy case, and he or she will assess your assets and determine what assets are exempt and what assets can be sold to help pay back your creditors. However, there are many people who file chapter 7 without any assets, in which case the trustee will have nothing to sell.
Discharge of Debts
After your chapter 7 bankruptcy is approved by the court, you will receive documentation that shows that your debts have been discharged. This means that you are no longer legally liable to pay these debts back since you have been approved for bankruptcy. It is important to note that there are several kinds of debts that can't be discharged after your bankruptcy is approved, such as student loans, owed back taxes, and child support.
For more information, contact chapter 7 bankruptcy filing services in your area.