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4 Things to Know About Chapter 7 Bankrtupcy

4 February 2015

Arthur Young

If you are faced with debt that you can't pay, you may need to consider filing for bankruptcy. This is a legal status that may discharge some or all of your debt. It's important if you are in this situation to understand specific things about filing for Chapter 7 bankruptcy before beginning this legal process.

The costs

When you're dealing with a financial problem, the last thing you want to face is huge fees. Filing for a Chapter 7 bankruptcy is affordable for most people. The court and administrative costs are $335 as of June 1, 2014 if you file for this status without an attorney.

If you enlist the assistance of an attorney, the additional costs will be based on the lawyer's fee.  

The forms

You must prove that you are eligible for this bankruptcy before it will be granted to you. There are a number of forms you must complete. Basically, these forms will help you provide the following information:

1. The amount of your income and proof of it
2. Your monthly expenses, such as shelter, clothing and food
3. You are required to list your debt, and if you owe more than one creditor. These amounts should be individually listed.

 It is important to only provide accurate information on these forms because you could be found guilty of fraud if you do otherwise.

The automatic stay

One of the largest advantages of filing for a Chapter 7 bankruptcy is being granted the automatic stay. This will protect you from creditors calling your home and harassing you for a payment when you simply don't have the money.

Additionally, this will prevent the creditor from being capable of to take a legal action against you which is possible without having the automatic stay in place.

The debt

The most common type of debt that is discharged with this type of bankruptcy is unsecured debt. For instance, credit card debt is unsecured because there is no collateral to back it up in the event it can't be paid.

Additionally, if you have incurred large medical bills that can't be paid, these are typically discharged when you are eligible for this type of bankruptcy.

Finally, being able to get rid of large financial burdens is critical to your financial and mental well-being. Be sure to work with a bankruptcy law firm such as Brackett & Strunk LLC to help you file for this status if you have debt that is outstanding and can't be paid.  

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