Chapter 7 Bankruptcy Basics PDF Print E-mail
Written by Harvey L. Cox   
Thursday, 24 June 2010 12:45
Ultimately a Chapter 7 bankruptcy provides you relief from nearly all, if not all, of your debt. It provides you a way to start over with your finances.
by HarveyL.Cox


Ultimately a Chapter 7 bankruptcy provides you relief from nearly all, if not all, of your debt. It provides you a way to start over with your finances.

The laws and regulations governing Chapter 7 bankruptcy have changed extensively over the past few years. However, the aim hasn't changed. It exists to aid citizens who get themselves in a financial situation where they have an overwhelming amount of debt with no prospect of ever being able to completely pay that debt off.

To start a bankruptcy, you have to file a bankruptcy petition in Federal bankruptcy court. It's highly recommended that you use an attorney to handle this filing for you. Once your lawyer files your bankruptcy petition, you get immediate protection from any action by your debt collectors. That protection is termed an "automatic stay." In essence, the automatic stay of bankruptcy stops all collection action by your debt collectors. In truth, as soon as you file your bankruptcy petition, your debt collectors are prohibited by federal law from contacting you for payment or from filing any sort of collection proceedings against you.

As part of your bankruptcy proceeding, you'll have to go to a hearing at bankruptcy court. This hearing ordinarily takes place in a room with you, the bankruptcy trustee (i.e., the person assigned by the court to oversee your case) and your attorney. The entire process usually only takes about 15 minutes, in the course of which the trustee will ask you a number of questions regarding your take-home pay and your debts. At the end of the hearing, the trustee makes a recommendation to the bankruptcy court to discharge your debt. A discharge order is then mailed to you. It might take some months for you to actually receive your discharge order.

Be aware that your creditors might appear at your hearing to speak for their interests and oppose your bankruptcy discharge. But, it's truly an unusual situation where a creditor actually appears. In most cases, the bankruptcy is quite effortlessly executed without any protests from creditors.

Bankruptcy may be your only out if you are burdened underneath a sizeable quantity of debt which you have no means to pay off. So, if you are in debt way over your head and are having difficulty making standard payments, you owe it to yourself to at least speak with a bankruptcy attorney about the prospect of filing a Chapter 7 bankruptcy.

DISCLAIMER: This article is provided as information only and is not to be taken as financial advice.

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