If you are thinking about pursuing bankruptcy as a way out of debt and are leaning towards using Chapter 7, it is important for you to find out exactly how this branch works and the effects it will have on you. If you do not know a lot about Chapter 7 bankruptcy, here are five vital things you should know.
The costs for filing
There are fees you must pay to file for bankruptcy, and the main two fees are the court filing fees and the legal fees. Court filing fees are required for everyone who files for bankruptcy, even people who file do-it-yourself bankruptcies. If you decide to hire a lawyer for help, which is the best way to file for bankruptcy, the lawyer will charge fees for handling your case. The total amount you will spend may vary, but you should expect to spend at least $1,000 on your case.
The required court appearance
In Chapter 7, there is one mandatory court appearance, which is called the meeting of the creditors. This occurs shortly after you file your case, and it is usually the only court appearance required for a Chapter 7 case.
The benefits of an automatic stay
After filing, you will instantly receive protection from your creditors, and this is called an automatic stay. This protection is what prevents creditors from calling you or contacting you through any method with the intent of trying to collect the money you owe. People who file for Chapter 7 instantly feel a sense of relief due to the automatic stay.
The effects on your debts
It is also important to know exactly how bankruptcy will affect your debts, and you can find this out by meeting with an attorney. Through Chapter 7, you should be able to receive debt forgiveness on a lot of the debts you owe; however, it does not offer forgiveness on every debt.
The effects on your assets
The other thing you should realize is that there are risks with filing for Chapter 7, and the main risk is the potential to lose things you own. The court can decide to take away possessions you have when you use this method, and you will know the risks of this before you file.
These are five of the most important things to know if you are thinking about filing for Chapter 7 bankruptcy. If you have questions about these things or other things related to bankruptcy, call a professional like David M. Todaro Co., LPA.
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