What Have You Heard About Chapter 7 Bankruptcy? The Real Facts You Need To Know

Unfortunately, many bankruptcy applicants fail due to a lack of proper information. Usually, they rely on information from friends or the internet. Remember that misleading information can lead to poor decision-making and denial of an application. The surest way to go about this process is by consulting an attorney. This article looks at detailed facts about chapter 7 bankruptcy your attorney might want you to know.  

This Chapter Doesn't Suit Everyone Seeking to Declare Bankruptcy 

Chapter 7 is not ideal for every applicant compared to other bankruptcy chapters. This is because the filing regulations limit some people from declaring bankruptcy under this chapter. That includes applicants who can afford monthly installments to repay their debts. The court usually determines applicants' ability to repay their loans by analyzing their salary and monthly expenditure. If the money left after settling essential expenses can pay monthly debt installments, the court declares the individual ineligible to file for bankruptcy under chapter 7.

Luckily, you can seek other alternatives in declaring bankruptcy. So first, ask your bankruptcy attorney to help determine the right bankruptcy chapter for your situation. Typically, they will do this by evaluating your type of debt. That way, they can select the bankruptcy type that will discharge most of the money you owe your creditors. And if you're eligible for chapter 7 bankruptcy, they will guide you through the filing process to ensure you qualify.

The Processes in This Chapter Are Slightly Different 

The steps involved in declaring bankruptcy under chapter 7 differ slightly from other bankruptcy types. For instance, the court appoints a trustee whose work is to oversee the implementation of the debt repayment after approving an application. The trustee is in charge of selling off assets as declared by debtors. They then use the proceeds raised to pay off the various debts the applicant owes. That means if you declare bankruptcy under this chapter, you might lose many assets, making it challenging to continue with your business operations. This explains why you need to discuss your case with an attorney before filing. They will evaluate your situation and determine whether filing chapter 7 is the right option.  

If you're planning to file a chapter 7 bankruptcy, don't go into the process blindly. Instead, contact a bankruptcy lawyer for advice before filing. They will explain everything you need to know about this chapter. You will make informed decisions by understanding the pros and cons of chapter 7.

Consult a bankruptcy attorney to learn more.