As early as now, you must understand that going for a bankruptcy claim is not as easy as counting from one to three. Do not go for it just because it is your first recourse. You have to look deeply into the core of the bankruptcy laws, so to speak.
The bankruptcy law is crafted to promote the provisions that come along the filing of bankruptcy claims. It is a systematized body of legal coverage which guides the debtor in his attempt to rid himself of the financial obligations that he is faced with. The Chapter 7 bankruptcy law is otherwise referred to as straight bankruptcy. This law involves the liquidation process. In a simple analysis, the Chapter 7 bankruptcy law stresses out that there is the need for the debtor to surrender all his remaining properties and assets with the exemption of those exempted or unaccredited ones to the trustee in bankruptcy or the lawyer. The trustee in bankruptcy is to be assigned by the court and he takes charge of selling or converting those assets into cash. As soon as they have been converted into cash, the fund is given back to the creditors as payment. Chapter 7 bankruptcy law likewise discharges you from the obligation after about four months.
When is the Chapter 7 bankruptcy law most applicable?
When the debtor has no other property to lose or give up, the ruling of Chapter 7 bankruptcy law is best to adopt to have a new start. This is the most filed bankruptcy kind in the United States either by business corporations or individuals. Abiding to the Chapter 7 bankruptcy law could rather be personally filed or imposed by the court itself. If you are running a business, the Chapter 7 bankruptcy law would prompt you to sell every single asset that you have, return the amount of money that you owe the creditors, and eventually close down the business operation. As for the individuals who are prodded to file for Chapter 7 bankruptcy law, the procedures are entirely similar only less the fact that you have nothing to close down.
What are the pros of filing for a claim for the Chapter 7 bankruptcy law?
First and foremost, any amount of debt could possibly be cleared out and as soon as you are cleared out of the mess, you get a clean slate. There is no required amount of debt that would qualify you to file for the Chapter 7 bankruptcy law. The creditors are bound to stop exerting authority over you as per the protection granted to you by the Chapter 7 bankruptcy law. It is swift to be processed and in around four or six months, you are discharged from the debts.
What are the disadvantages that come along the Chapter 7 bankruptcy law?
You could come to a point of giving up your entire property. Not all of your debts are discharged such as the child support, taxes, student loans, housing mortgages, and the car loans. The co-signers to our home loan would be dragged into paying for the loans you’ve incurred. The Chapter 7 bankruptcy law could only be secured once in every six-year-period. Your credit rating will be stained and it would be a pain in the neck to apply for other loans. As you’ve filed for the Chapter 7 bankruptcy law, you could no longer withdraw it. Take one step at a time as you consider filing for the provisions based on the Chapter 7 bankruptcy law. You need protection and not another headache.