99% of all Bankruptcies filed fall into one of three categories: Chapter 7 Chapter 11 or Chapter 13. Of the three Chapter 7 is the most common, is the one used primarily by individuals overrun with debt and consequently, is most likely the provision you will use. Chapter 7 involves the liquidation of assets to repay your debts. The balance is then excused by the court. You are no longer liable for the debt. It vanishes and it can't come back. Chapter 7 is, in most cases the fastest and easiest of the three types. While your assets are at risk with Chapter 7, there are exemptions involving cars and houses, depending on circumstances and state laws. The specifics are numerous and slightly outside the scope of this article but the answers can be found through this site so look around and find what best will answer your questions.
Before you decide and move forward with chapter 7 bankruptcy you need to ask yourself some serious questions. Namely, is chapter 7 the best thing for me? A simple question, certainly, but some of the simplest things are the most important. Will you be better off after you declare chapter 7 then you were before. Would it be better to go in another direction? Debt consolidation perhaps may be a way that could minimize your debt and improve your credit. A chapter 7 bankruptcy on your file is a blemish, certainly, but it is not as bad as some people think. After a number of years (usually 7 but it varies in some states) the bankruptcy will be removed from your credit report. One pitfall people fall into is one of morality. People who consider Chapter 7 are often racked with guilt over the decision. Whaile this is indeed admirable in this day and age, it should not prevent you from declaring chapter 7. Corporations have built into their gameplans the reality that many of their borrowers, leasees, etc will in fact declare bankruptcy. Their head is not on the chopping block, YOURS is. So don't stay up at nights worrying about the big corporation, they will be fine. Your first and only priority should be you and your family. If you are able to get out from under the debt you are in, then the corporations stand to benefit from the business you may give them in the future. Credit Card companies for instance issue cards, knowing full well that a certain percentage of their holders will declare chapter 7. Amazing huh!?
So again, the main question is: Is Chapter 7 right for me? Because of the ding on your credit, the answer to this question should be reached carefully but in many cases Declaring chapter 7 CAN and WILL improve your situation and put you in a better position to continue to improve your finances. As always counsil from a professional is advised. Speak to a laywer or debt expert to see if they think chapter 7 is right for you.
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