If you have found yourself facing a mountain of debt, filing for Chapter 7 bankruptcy may allow you to enjoy the financial fresh start that you need to truly overcome this debt. However, like all debt relief options, personal bankruptcy will not be the right solution for everyone. This is why it is so important for you to truly educate yourself regarding this option before filing a petition with the court. The three facts outlined below will play an important role in ensuring you make the best possible decision for your situation.
Fact: Not All Debts Can Be Discharged As Part Of A Chapter 7 Bankruptcy
Far too many people go into bankruptcy assuming that they will emerge from this process with absolutely no debt. However, this is rarely the case. This is because not all debts will be eligible for discharge as part of your Chapter 7 bankruptcy settlement.
Chapter 7 bankruptcy laws allow for the discharge of many unsecured debts. These are debts that are obtained without the use of collateral, such as medical and credit card bills. These laws do not allow for the discharge of secured debts, such as your mortgage or car loan. Consequently, if you wish to be truly debt free, you will still need to make satisfactory payment arrangements with your creditors in order to pay off these secured debts.
Fact: You May Be Required To Surrender Certain Assets
Bankruptcy laws are designed to establish a fair settlement between the debtor and the creditor. In order to remain fair to both parties, the court will require that as much of your debt as possible is paid before the remaining balance is discharged. One of the ways in which this is accomplished is by limiting the assets that you can maintain when filing bankruptcy.
The type and value of the assets you are allowed to keep will be outlined by what is known as property exemption laws. For instance, if you live in the State of Florida, property exemption laws will allow you to maintain up to $1,000 in equity in your primary vehicle. If the value of your vehicle exceeds this amount, you will be required to sell the vehicle and use the excess proceeds to pay off a portion of your debt. The sale of this property will typically be overseen by a bankruptcy trustee that the court appoints.
Fact: Chapter 7 Bankruptcy Is Just One Of Many Debt Relief Options
People often feel as though filing for bankruptcy is the only option they have when trying to overcome obscene amounts of debt. However, the truth is, there are many different debt relief options that may be available to you, such as debt consolidation and credit counseling. There are also several other types of bankruptcy that you can choose to help you get out of debt, such as Chapter 11 or Chapter 13 bankruptcy. Taking the time to consult a qualified bankruptcy attorney in your local area will allow you to explore all of these options and determine which option is truly right for you.
For more information, talk to an experienced bankruptcy attorney from a law firm like Wagner Law Office PC.
Hello, I'm Phillip Kerr and I just love the legal profession and courtroom drama. Have you ever watched judge shows on TV? I know that these shows are not an accurate representation of the courtroom, but there is something you may have noticed. Some individuals come into the courtroom well-dressed, articulate, respectful and with the knowledge and documents necessary to support a case, while others come unprepared, slovenly dressed and appear as if they do not have a care in the world. How you present yourself and the knowledge that you have of the law will have an impact on how you are treated, even if you have legal representation. This blog is designed to assist those who are going to trial in doing just that.