Chapter 7 Bankruptcy refers to a type of bankruptcy in which many of your debts can be discharged through the process of liquidation. After your property items have been assessed, your non-exempt assets will be liquidated and sold so that the monetary proceeds can be used to satisfy your debts. However, choosing between Chapter 7 and Chapter 13 Bankruptcy takes a good deal of research on your part. Read on to learn more about the top reasons to pursue Chapter 7 Bankruptcy with an experienced bankruptcy law office.
Eliminate Various Debts The biggest reason to pursue Chapter 7 Bankruptcy is to eliminate credit card debts, outstanding car loans, medical bills, personal loans, and other types of unsecured debt.
Stop Foreclosure Proceedings Filing for bankruptcy puts an automatic stay on all foreclosure proceedings—alerting creditors and government agencies that they must cease all collection activities on your account. In this way, filing for Chapter 7 Bankruptcy not only eliminates various debts but can also prevent you from losing your home.
Keep Some of Your Property Chapter 7 Bankruptcy only liquidates certain property items or assets. For example, individuals filing for Chapter 7 must often give up second homes or vehicles, bank accounts and investments, family heirlooms, and collectibles. However, you can usually keep motor vehicles up to a certain value, necessary clothing and household furnishings, appliances, pensions, tools needed for your profession, and a portion of your home equity.
Avoid a Costly Repayment Plan Another common reason to pursue Chapter 7 Bankruptcy is the inability to restructure your debts due to insufficient funds or income. Individuals who cannot afford to file for Chapter 13 Bankruptcy and pay back their debts over a period of three to five years can benefit from liquidation bankruptcy instead.
The best way to determine if Chapter 7 Bankruptcy is right for you is to consult with an experienced bankruptcy attorney. For more information on filing for bankruptcy, avoiding foreclosure, or obtaining debt relief contact the affordable bankruptcy and foreclosure attorneys with the Golden State Law Group at (619) 234-3333.