Chapter 7 Bankruptcy and Becoming Debt Free
What would be among the prime reasons one would seek to file for Chapter 7 bankruptcy? There are several protections many will seek filing for this chapter of bankruptcy.
However, if one were to be pressed for a single answer as to the reasons for the filing, the likely response would be the individual wishes to become debt free.
This should not exactly come as much of a surprise.
It was a massive amount of debt that led to the need to file for bankruptcy in the first place.
Through the effective filing of Chapter 7 bankruptcy, the potential to become debt free is a strong possibility.
What is Chapter 7 Bankruptcy? Chapter 7 bankruptcy is the most popular form of bankruptcy that is filed in the United States.
The reason that it is popular (albeit it is not enjoyable) is that this mode of bankruptcy has the potential to help you get out of debt in the quickest manner possible.
This is not to say that you would be able to get out of debt overnight.
However, a logical process will be set in motion that opens a pathway for dealing with your excessive debt situation.
The way this mode of bankruptcy works is relatively simple in design and concept.
It can be considered a form of liquidation bankruptcy.
That means that all assets that are not exempt will be sold (liquidated) and all monies generated from the sale will then go to those debtors that are owed money.
Obviously, there is more to the process than this but that is the most simplified explanation of how it works.
If the liquidation leads to a complete payoff of all debts owed then the person that has filed for bankruptcy protection will be debt free.
Why not do this on your own? Why involve the court in the liquidation proceedings? Basically, the court also has the right to discharge (eliminate) or restructure (lower) debts.
This makes it easier for the debt to be paid off since a large portion of the debt will be changed.
Chapter 7 bankruptcy can be filed by both individuals and by businesses.
Those with a steady stream of income may wish to look towards Chapter 13 bankruptcy.
Corporations may wish to look towards Chapter 11 since liquidation of a business may make operations difficult.
For those individuals in dire need of starting over financially, Chapter 7 might be the best route to follow.
One thing does need to be mentioned about become debt free in the aftermath of a bankruptcy.
Namely, there will come a time when bankruptcy proceedings end.
When this occurs, the filer will get a proverbial new lease on life from a financial perspective.
At this point, it becomes critical to avoid the mistakes that led the individual into filing for bankruptcy in the first place.
Those that do not alter their fiscal approach will find they may end up in very similar trouble to what led them into a bankruptcy situation in the first place.
However, if one were to be pressed for a single answer as to the reasons for the filing, the likely response would be the individual wishes to become debt free.
This should not exactly come as much of a surprise.
It was a massive amount of debt that led to the need to file for bankruptcy in the first place.
Through the effective filing of Chapter 7 bankruptcy, the potential to become debt free is a strong possibility.
What is Chapter 7 Bankruptcy? Chapter 7 bankruptcy is the most popular form of bankruptcy that is filed in the United States.
The reason that it is popular (albeit it is not enjoyable) is that this mode of bankruptcy has the potential to help you get out of debt in the quickest manner possible.
This is not to say that you would be able to get out of debt overnight.
However, a logical process will be set in motion that opens a pathway for dealing with your excessive debt situation.
The way this mode of bankruptcy works is relatively simple in design and concept.
It can be considered a form of liquidation bankruptcy.
That means that all assets that are not exempt will be sold (liquidated) and all monies generated from the sale will then go to those debtors that are owed money.
Obviously, there is more to the process than this but that is the most simplified explanation of how it works.
If the liquidation leads to a complete payoff of all debts owed then the person that has filed for bankruptcy protection will be debt free.
Why not do this on your own? Why involve the court in the liquidation proceedings? Basically, the court also has the right to discharge (eliminate) or restructure (lower) debts.
This makes it easier for the debt to be paid off since a large portion of the debt will be changed.
Chapter 7 bankruptcy can be filed by both individuals and by businesses.
Those with a steady stream of income may wish to look towards Chapter 13 bankruptcy.
Corporations may wish to look towards Chapter 11 since liquidation of a business may make operations difficult.
For those individuals in dire need of starting over financially, Chapter 7 might be the best route to follow.
One thing does need to be mentioned about become debt free in the aftermath of a bankruptcy.
Namely, there will come a time when bankruptcy proceedings end.
When this occurs, the filer will get a proverbial new lease on life from a financial perspective.
At this point, it becomes critical to avoid the mistakes that led the individual into filing for bankruptcy in the first place.
Those that do not alter their fiscal approach will find they may end up in very similar trouble to what led them into a bankruptcy situation in the first place.
Source...