Bankruptcy can be an extremely stressful and frightening process to consider. While you may want to think about going through some type of credit counseling before you decide you want to file bankruptcy, depending on the amount of your debt, bankruptcy may be your only option. So it's important that you sit down with a bankruptcy attorney in order to discuss all of your options. There are a few different types of bankruptcy, and this article will discuss your options when you file for Chapter 7 bankruptcy.
You're Relieved From Debt, But Will Lose Assets
If you file for Chapter 7 bankruptcy, you will be released from the debt that qualifies for Chapter 7. Sounds easy enough, right? The problem is, you still have to find some money to pay off some of the debt, so you will lose some of your non-exempt assets.
When you petition the court for Chapter 7 bankruptcy, you will have to provide the court a detailed list of all of the property you own, including any property that you owned and sold two years prior to your filing. You will also need to let the court know how much you make per month, and how much your monthly bills are.
Trustee Takes Over Your Bankruptcy Estate
The court will appoint a trustee to take over your bankruptcy estate. What this means is that all of the assets that will be sold to pay off your debt will be sold by the trustee. You will not be able to handle any of the money.
The court allows you to keep some assets, and these assets are called "exempt assets." You are allowed to keep the equity in your home, as well as a motor vehicle. If you have any tools or equipment that are valuable, but are required for your line of work, you can keep those as well. The court will also allow you to keep some of your household furnishings, as well as some of your clothing.
While this all may seem a bit extreme and stressful, understand that it is one of the most effective ways for anyone to get out of debt. And if you don't have a consistent and dependable income, you will have no choice but to file for Chapter 7 bankruptcy. Consult with a bankruptcy attorney, from a firm like FactorLaw, as soon as possible for more information on what may work best for you.Share
12 December 2014
Like many people, I once found learning about law very intimidating. My brother went to law school and I remember glancing through a few of his books and wondering if I was actually reading English due to all of the legal jargon in them! However, when I ended up in a sticky legal situation due to accidentally breaking a small law I didn't know existed, I realized that I needed to learn more about the law, so I could make sure to follow it precisely in the future. My brother helped to break down some complicated legal concepts to me, and I have since been studying up online. I want to post what I have learned and continue to learn about law in the future on my new blog, so my knowledge cannot only help myself, but also help others!