Chapter 7 bankruptcy is the most common type of consumer bankruptcy and may be the right alternative for your financial situation. In Chapter 7 bankruptcy, the creditors will stop hounding you and you will be able to move on with your life without worrying about the overwhelming debts holding you back. Below are some important facts about the Chapter 7 process:
Chapter 7 bankruptcy is often referred to as "liquidation" or "straight" bankruptcy.
Chapter 7 bankruptcy will stop all creditors and wage garnishment. This is referred to as "automatic stay."
In Chapter 7 bankruptcy, the debtor is required to liquidate, or sell, non exempt property in exchange for a discharge of your debt. These proceeds are distributed to the creditors.
Many people will assume that, with Chapter 7 bankruptcy, they will lose all their secured debt as well, including their home and vehicles. This is actually not the case. It is possible to keep your home and car and other secured debts up to a certain amount.
Chapter 7 bankruptcy is used to eliminate your legal obligation to pay unsecured dischargeable debts.
Under Chapter 7 bankruptcy, these debts may include unpaid medical bills, credit card bills, utility bills and some bank loans.
Although most debt is dischargeable in Chapter 7 bankruptcy, some debt is not. This may include court-ordered fines, tax debt, debt incurred by fraud, student loans and child support.
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The Law Offices of Michael D. Croddy 331 J Street #200, Sacramento, CA 95814 (916) 444-2248